douglas o’connor et al - united states court of...

NO. 15- 17532/16-15000, 15-17534/16-15001

IN THE UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

DOUGLAS O’CONNOR et al, No. 15-17532, 16-15000

Plaintiff-Appellee/Cross-Appellant, No. C-13-3826-EMC

v. N. Dist. Cal., San Francisco

UBER TECHNOLOGIES, INC., Hon. Edward M. Chen presiding

Defendant-Appellant/Cross-Appellee

__________________________________________________________________

HAKAN YUCESOY et al, No. 15-17534, 16-15001

Plaintiff-Appellee/Cross-Appellant, No. C-15-00262-EMC

v. N. Dist. Cal., San Francisco

UBER TECHNOLOGIES, INC., et al., Hon. Edward M. Chen presiding

Defendant-Appellants/Cross-Appellees

PLAINTIFF-APPELLEES/CROSS-APPELLANTS’

DOUGLAS O’CONNOR AND HAKAN YUCESOY’s

CONSOLIDATED PRINCIPAL AND RESPONSE BRIEF

Shannon Liss-Riordan

Adelaide Pagano

LICHTEN & LISS-RIORDAN, P.C.

729 Boylston Street, Suite 2000

Boston, MA 02114

(617) 994-5800

Counsel for Plaintiff-Appellees/Cross-Appellants

Douglas O’Connor et al and Hakan Yucesoy et al

Case: 15-17532, 03/03/2016, ID: 9889176, DktEntry: 22, of 73

i

TABLE OF CONTENTS

INTRODUCTION ..................................................................................................... 1

STATEMENT OF JURISDICTION.......................................................................... 5

STATEMENT OF ISSUES ....................................................................................... 6

STATEMENT OF THE CASE .................................................................................. 7

1. Uber’s History of Abusive Use of Arbitration Agreements in This

Litigation.....................................................................................................11

2. The Facts Giving Rise To This Appeal. .....................................................15

SUMMARY OF THE ARGUMENT ......................................................................18

ARGUMENT ...........................................................................................................21

I. The Standard of Review. ............................................................................21

II. The District Court Acted Well Within Its Rule 23 Powers In Invalidating

Uber’s Arbitration Agreement With Respect To Members of The

O’Connor Certified Class And In Requiring Approval of Future

Communications with Class Members and Putative Class Members. .......22

III. The District Court Erred In Holding That Uber Could Limit the Scope of

Other Putative Classes, For Cases Already Filed, By Sending Out New

Arbitration Agreements That Purported to “Fix” The Invalidity That Led

The Court to Hold The Previous Arbitration Clause Invalid. ....................35

A. By Allowing Uber to Distribute New Arbitration Agreements to Putative

Class Members in Cases Already Filed, the Court Essentially Converted

These Class Action Cases From Opt-Out To Opt-In Proceedings, Thus

Undermining the Dictates of Rule 23. .......................................................45

B. The FAA Does Not Preempt Fed. R. Civ. P. 23 And Does Not Grant Uber

An Unfettered Right to Distribute Arbitration Agreements To Putative

Class Members So as to Unilaterally Undermine Rule 23 And Engage in

Gamesmanship With Respect to Pending Class Litigation. ......................51

C. Uber’s December 2015 Arbitration Agreement, Distributed Nationwide

Two Days After the District Court Held Its Previous Agreement

Unenforceable, Was Not An “Ordinary Business Communication”, But

Was Instead a Clear Attempt To Escape The District Court’s Recent


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Ruling And Limit Its Liability in Cases Already Filed for Which Classes

Had Not Yet Been Certified. .....................................................................56

CONCLUSION ........................................................................................................60


iii

TABLE OF AUTHORITIES

Cases

AT&T Mobility LLC v. Concepcion

563 U.S. 333 (2011) ................................................................................. 51, 52, 54

Austen v. Catterton Partners V, LP

831 F.Supp.2d. 559 (D. Conn. 2011) ....................................................................38

Balasanyan v. Nordstrom, Inc.

2012 WL 1944609 (S.D. Cal. May 30, 2012) ......................................................54


2012 WL 760566 (S.D. Cal. Mar. 8, 2012) ............................................... 4, 19, 40


294 F.R.D. 550 (S.D. Cal. 2013) ..........................................................................58

Basco v. Wal-Mart Stores, Inc.

2002 WL 272384 (E.D. La. Feb. 25, 2002) ................................................... 23, 31

Billingsley v. Citi Trends, Inc.

560 F. App'x 914 (11th Cir. 2014) ........................................................... 40, 56, 57

Brown v. Mustang Sally’s Spirits & Grill, Inc.

2012 WL 4764585 (W.D.N.Y. Oct. 5, 2012) .......................................................38

Buck v. Republic Services, Inc.

2013 WL 2321784 (E.D. Mo. May 28, 2013) ......................................................33

Burrell v. Crown Cent. Petroleum, Inc.

176 F.R.D. 243 (E.D. Tex. 1997) .........................................................................39

California ex rel. Sacramento Metro. Air Quality Mgmt. Dist. v. United States

215 F.3d 1005 (9th Cir. 2000) ..............................................................................55

Camp v. Alexander

300 F.R.D. 617 (N.D. Cal. 2014) ..........................................................................26

Carnegie v. H&R Block, Inc.

180 Misc.2d 67 (N.Y.S.C. Jan. 7, 1999) ...............................................................41

Chase v. AIMCO Properties, L.P.

374 F. Supp. 2d 196 (D.D.C. 2005) ......................................................................47


iv

CompuCredit Corp. v. Greenwood

132 S. Ct. 665 (2012) ............................................................................................53

County Of Santa Clara v. Astra USA, Inc.

2010 WL 2724512 (N.D. Cal. July 8, 2010) ........................................... 36, 38, 56

Cox v. Am. Cast Iron Pipe Co.

784 F.2d 1546 (11th Cir.1986) .............................................................................45

Cty. Of Santa Clara v. Astra USA, Inc.

2010 WL 2724512 (N.D. Cal. July 8, 2010) ........................................................32

De Asencio v. Tyson Foods, Inc.

342 F.3d 301 (3d Cir. 2003) .................................................................................50

Enter. Wall Paper Mfg. Co. v. Bodman

85 F.R.D. 325 (S.D.N.Y. 1980) ..................................................................... 45, 49

Espinoza v. Galardi S. Enterprises, Inc.

2015 WL 9592535 (S.D. Fla. Dec. 31, 2015) ................................................ 40, 57

Freidman v. Intervet Inc.

730 F. Supp. 2d 758 (N.D. Ohio 2010) ......................................................... 38, 56

Guifu Li v. A Perfect Day Franchise, Inc.

270 F.R.D. 509 (N.D. Cal. 2010) ....................................................... 19, 38, 39, 56

Gulf Oil Co. v. Bernard

452 U.S. 89 (1981) ........................................................................................ passim

Guzman v. VLM, Inc.

2008 WL 597186 (E.D.N.Y. Mar. 2, 2008) ..........................................................48

Haffer v. Temple Univ. of Commonwealth Sys. of Higher Educ.

115 F.R.D. 506 (E.D.Pa.1987) ..............................................................................31

Hampton Hardware, Inc. v. Cotter & Co.

156 F.R.D. 630 (N.D.Tex.1994) ...........................................................................31

Haro v. City of Rosemead

94 Cal. Rptr. 3d 874 (Cal. App. 2d Dist. 2009) ....................................................49

Harris v. Vector Mktg. Corp.

716 F. Supp. 2d 835 (N.D. Cal. 2010) ..................................................................31

Idaho Watersheds Project v. Hahn

307 F.3d 815 (9th Cir. 2002) ................................................................................21

In re Currency Conversion Fee Antitrust Litigation

361 F.Supp.2d 237 (S.D.N.Y. 2005) ............................................................. 41, 54


v

Ingram v. Coca-Cola Co.

200 F.R.D. 685 (N.D. Ga. 2001)...........................................................................48

Jack Faucett Associates, Inc.. v. Am. Tel. and Tel. Co.

1985 WL 6267 (D.D.C. Sept. 30, 1985) ...............................................................34

Jacobs v. CSAA Inter-Ins.

2009 WL 1201996 (N.D. Cal. May 1, 2009) ........................................................31

Jankowski v. Castaldi

2006 WL 118973 (E.D.N.Y. Jan. 13, 2006) .........................................................48

Jimenez v. Menzies Aviation Inc.

2015 WL 4914727 (N.D. Cal. Aug. 17, 2015) .....................................................40

Kern v. Siemens Corp.

393 F.3d 120 (2d Cir. 2004) .................................................................... 45, 46, 49

Keystone Tobacco Co., Inc. v. U.S. Tobacco Co.

238 F. Supp. 2d 151 (D.D.C. 2002) ............................................................... 23, 31

Kleiner v. First Nat’l Bank of Atlanta

751 F.2d 1193 (11th Cir. 1985) ............................................................... 23, 26, 37

Leuthold v. Destination Am., Inc.

224 F.R.D. 462 (N.D. Cal. 2004) ..........................................................................50

Leyva v. Buley

125 F.R.D. 512 (E.D. Wash. 1989).......................................................................48

Mace v. Van Ru Credit Corp.

109 F.3d 338 (7th Cir. 1997) ................................................................................47

Makaeff v. Trump U., LLC

2015 WL 5638192 (S.D. Cal. Sept. 21, 2015) ......................................................49

McCarthy v. Paine Webber Group, Inc.

164 F.R.D. 309 (D.Conn.1995) ............................................................................45

McLaughlin v. Liberty Mut. Ins. Co.

224 F.R.D. 304 (D. Mass. 2004) ...........................................................................47

Mevorah v. Wells Fargo Home Mortg.

2005 WL 4813532 (N.D. Cal. 2005) ............................................................. 23, 31

Mohamed v. Uber Techs., Inc.

109 F. Supp. 3d 1185 (N.D. Cal. 2015) ................................................... 13, 14, 25

Mohamed v. Uber Techs., Inc.,

2015 WL 4483990 (N.D. Cal. July 22, 2015) ......................................................13


vi

Morton v. Mancari

417 U.S. 535 (1974) ..............................................................................................55

Moscarelli v. Stamm

288 F.Supp. 453 (E.D.N.Y. 1968) ........................................................................47

O’Connor v. Uber Techs., Inc.

82 F. Supp. 3d 1133 (N.D. Cal. 2015) ..............................................................9, 38

O'Connor v. Uber Techs., Inc.

2013 WL 6354534 (N.D. Cal. Dec. 5, 2013) .......................................................... 8


2013 WL 6407583 (N.D. Cal. Dec. 6, 2013) ................................................. 57, 58


2014 WL 1760314 (N.D. Cal. May 2, 2014) ........................................... 13, 17, 21


58 F. Supp. 3d 989 (N.D. Cal. 2014) ...................................................................... 8

Pablo v. ServiceMaster Glob. Holdings Inc.

2011 WL 3476473 (N.D. Cal. Aug. 9, 2011) .......................................................58

Parks v. Eastwood Ins. Servs.

235 F.Supp.2d 1082 (C.D.Cal.2002) ....................................................................31

Phillips Petroleum Co. v. Shutts

472 U.S. 797 (1985) ..............................................................................................47

Piekarski v. Amedisys Illinois, LLC

4 F. Supp. 3d 952 (N.D. Ill. 2013) ................................................................. 41, 42

Ralph Oldsmobile Inc. v. General Motors Corp.

2001 WL 1035132 (S.D.N.Y. Sep. 7, 2001) .........................................................39

Ramirez v. RDO-BOS Farms, LLC

2007 WL 273604 (D. Or. Jan. 23, 2007) ..............................................................48

Recinos-Recinos v. Express Forestry, Inc.

2006 WL 197030 (E.D. La. Jan. 24, 2006) ...........................................................33

Russell v. Citigroup, Inc.

748 F.3d 677 (6th Cir. 2014) ................................................................................40

Sakkab v. Luxottica Retail N. Am., Inc.,

803 F.3d 425 (9th Cir. 2015) ......................................................................... 14, 15

Shady Grove Orthopedic Associates, P.A. v. Allstate Ins. Co.

559 U.S. 393 (2010) ....................................................................................... 52, 53


vii

Shearson/American Express Inc. v. McMahon

482 U.S. 220 (1987) ..............................................................................................53

Slavkov v. Fast Water Heater Partners I, LP

2015 WL 6674575 (N.D. Cal. Nov. 2, 2015) ................................................ 37, 56

Sullivan v. Oracle Corp.

51 Cal. 4th 1191 (2011) .......................................................................................... 8

United States v. Estate Preservation Servs.

202 F.3d 1093 (9th Cir. 2000) ...............................................................................21

United States v. Schiff

379 F.3d 621 (9th Cir. 2004) ......................................................................... 21, 22

Wang v. Chinese Daily News, Inc.

623 F.3d 743 (9th Cir. 2010) ..................................................................... 4, 19, 38

Williams v. Securitas Sec. Serv. USA, Inc.

2011 WL 2713741 (E.D. Pa. July 13, 2011) ..................................... 41, 42, 54, 57

Wright v. Adventures Rolling Cross Country, Inc.

2012 WL 2239797 (N.D. Cal. June 15, 2012) ......................................................26

Statutes

28 U.S.C. § 1292 ........................................................................................................ 6

28 U.S.C. § 1332(d) ................................................................................................... 5

Rules

Fed. R. Civ. P. 23 ............................................................................................. passim

Other Authorities

Andrew C. Brunsden, Hybrid Class Actions, Dual Certification, and Wage Law

Enforcement in the Federal Courts

29 Berkeley J. Empl. & Lab. L. 269 (2008) .................................................. 47, 51

Arbitration Fairness Act of 2011

S. 987, 112th Cong. (2011) ...................................................................................55

Benjamin Kaplan, Continuing Work of the Civil Committee: 1966 Amendments of

the Federal Rules of Civil Procedure (I)

81 Harv. L. Rev. 356 (1967) .................................................................................46

Charles A. Wright, Class Actions

47 F.R.D. 169 (1970) ............................................................................................53


viii

Gary L. Sasso, et al., Defense Against Class Certification

744 P.L.I./Litig. 389 (2006) ..................................................................................51

Jean R. Sternlight, As Mandatory Binding Arbitration Meets the Class Action, Will

the Class Action Survive?

42 Wm. & Mary L. Rev. 1 (2000) ........................................................................50

John C. Coffee, Jr., Litigation Governance: Taking Accountability Seriously

110 Colum. L. Rev. 288 (2010) ............................................................................49

Judith Resnik, Fairness in Numbers: A Comment on at&t v. Concepcion, Wal-

Mart v. Dukes, and Turner v. Rogers

125 Harv. L. Rev. 78 (2011) .................................................................................50

Manual of Complex Litig. § 21.33 (4th ed. 2004) ...................................................31

Marc J. Mandich, AT&T v. Concepcion: The End of the Modern Consumer Class

Action

14 Loy. J. Pub. Int. L 205 (2012) ..........................................................................55

Matthew W. Lampe & E. Michael Rossman, Procedural Approaches for

Countering the Dual-Filed FLSA Collective Action and State-Law Wage Class

Action

20 The Lab. Law. 311 (2005) ...............................................................................51

Rachel K. Alexander, Federal Tails and State Puppy Dogs: Preempting Parallel

State Wage Claims to Preserve the Integrity of Federal Group Wage Actions

58 Am. U.L. Rev. 515 (2009) ...............................................................................51

Samuel Issacharoff & Geoffrey P. Miller, Will Aggregate Litigation Come to

Europe?

62 Vand. L. Rev. 179 (2009) ................................................................................50

Theodore Eisenberg & Geoffrey Miller, The Role of Opt-Outs and Objectors in

Class Action Litigation: Theoretical and Empirical Issues

57 Vand. L. Rev. 1529 (2004) ..............................................................................51


1

INTRODUCTION

These appeals concern a pattern of abusive behavior and gamesmanship by

Defendant Uber Technologies, Inc., in which Uber has repeatedly sought to use

arbitration agreements to cut off its drivers’ right to participate in pending class

actions brought on their behalf, and to thereby unilaterally limit its own liability.

In particular, this appeal concerns Uber’s issuance of a revised arbitration

agreement to its drivers across the country, which purported on its face to waive

class members’ right to participate in a pending (already certified) class action,

O’Connor v. Uber Technologies, C.A. No. 13-3826 (N.D. Cal.), as well as putative

class members’ right to participate in a pending (not yet certified) class action,

Yucesoy v. Uber Technologies, C.A. No. 3:15-cv-00262 (N.D. Cal.) (as well as

other class cases that had been filed but not yet certified). Uber’s revised

December 2015 agreement was distributed to drivers in the midst of pending

litigation and admittedly in direct response to the District Court’s Order issued two

days earlier in the O’Connor case, which had just invalidated its previous

arbitration agreement. Uber’s issuance of the December 2015 agreement was not

an ordinary business communication, but rather a blatant attempt to nullify the

District Court’s Order, which had invalidated Uber’s previous arbitration

agreement, and to usurp the District Court’s role in managing and overseeing the

orderly progression of these class action cases. The revised December 2015


2

agreement resulted in massive confusion among class members and putative class

members and effectively allowed Uber to unilaterally convert putative opt-out

class actions into opt-in proceedings, thereby turning Fed. R. Civ. P. 23 on its

head.

In the face of Uber’s brazen actions, the District Court issued its Order of

December 23, 2015, which is the subject of this appeal. With respect to the

certified class in O’Connor, the District Court invalidated the December 2015

agreement and enjoined Uber from sending further agreements to certified class

members, or from engaging in further communication with class members that

could affect their rights, absent prior approval of class counsel or the court. ER-5.

In doing so, the court acted pursuant to the dictates of Gulf Oil Co. v. Bernard, 452

U.S. 89, 101 (1981) and Fed. R. Civ. P. 23(d), relying on “a clear record and

specific findings” that Uber’s new arbitration agreement was “a direct response to

the Court’s rulings in the ongoing class action litigation,” and that it had “led to

considerable confusion” among drivers. ER-4.

However, with respect to putative and potential class members, including the

proposed class in the Yucesoy action (as well as drivers who had been excluded

from the class certified in the O’Connor action, but who Plaintiffs may appeal their

exclusion), the District Court’s Order allowed Uber to continue sending arbitration

agreements to these drivers going forward, albeit with a corrective cover letter.


3

ER-7-8. This decision was in error. Uber should not be permitted to continue

using arbitration clauses abusively as a way to cut off putative class members’

right to participate in pending class litigation, and to thereby unilaterally convert

opt-out Rule 23 class actions into “opt-in” proceedings. Instead of putting a stop to

Uber’s efforts to engage in such tactics to limit its own potential liability, the

District Court erroneously ruled that Uber could continue to distribute new

arbitration agreements to prospective class members indefinitely, so long as they

included a marginally “better” cover letter with the agreement containing more

information about what was contained therein. See ER-6-7.

Plaintiffs have filed this cross-appeal on the ground that Uber should not be

permitted to continue to abuse arbitration as a means to extract waivers from

putative class members that would remove them from the protections of already-

filed class cases, and thereby to supplant the court-supervised notice and opt-out

procedures mandated by Rule 23. Though it was well within the District Court’s

Rule 23(d) powers to require Uber to issue corrective notice, the District Court’s

overly cautious approach is insufficient to protect class members’ rights and sets a

dangerous precedent that will allow defendants to misuse arbitration agreements

during ongoing class action litigation as a way to subvert Rule 23 and avoid class-

wide liability for pending claims.

Uber’s attempt to paint the District Court as hostile to arbitration is simply


4

unfounded. Instead, it is Uber’s attempt to usurp the District Court’s role under

Rule 23, and to limit its own liability through coercive and misleading means, that

is truly at issue in these appeals. The District Court has not shown an “improper

preference for class action litigation over arbitration,” nor has it suggested that

“drivers should opt out of arbitration.” Br. at 2-3 (emphasis omitted). Instead, the

District Court has simply exercised its “duty … to exercise control over a class

action and to enter appropriate orders governing the conduct of counsel and

parties.” Gulf Oil Co., 452 U.S. at 100; see also Wang v. Chinese Daily News,

Inc., 623 F.3d 743, 755 (9th Cir. 2010), cert. granted, judgment vacated, 132 S. Ct.

74 (2011) (“[B]ecause of opportunities for abuse and management challenges in

class actions, district courts have both the duty and the broad authority to exercise

control over a class action”); Balasanyan v. Nordstrom, Inc., 2012 WL 760566, *3

(S.D. Cal. Mar. 8, 2012) (“[A] court must protect the interest of putative class

members by preventing misleading communications, perhaps even disallowing

communications if they attempt to undermine Rule 23 by encouraging class

members not to join the suit.”). The District Court has an obligation under Rule 23

to protect class members and potential class members from coercion and abuse. A

court cannot and should not abdicate this duty simply because Uber has invoked

the Federal Arbitration Act and thereby distributed arbitration agreements to

putative class members, rather than distributing other forms of documents that


5

would affect the rights of class members or putative class members in the midst of

litigation, such as releases or class opt-out forms. As such, this Court should

uphold those aspects of the District Court’s Order below which invalidated Uber’s

December 2015 agreement and restricted Uber’s further communications with

class members and potential class members. However, the Court should reverse

the Order insofar as it allowed Uber to continue its abusive pattern of using

arbitration agreements to attempt to drastically limit its liability in already pending

cases by seeing to it that putative class members would no longer be able to

participate in the case.

STATEMENT OF JURISDICTION

The District Court has jurisdiction over the appeals in both O’Connor and

Yucesoy pursuant to 28 U.S.C. § 1332(d), because both class action cases involve

more than 100 people; the amount in controversy exceeds $5,000,000, exclusive of

interest and costs; and members of the proposed classes are citizens of a state

different from the defendant. 28 U.S.C. §1332(d)(2).1

Uber filed timely notices of appeal of the District Court’s Order of

December 23, 2015, which is the subject of this appeal, on December 28, 2015.

ER-17, ER-23. Plaintiffs filed a timely notice of cross-appeal of the same Order

1 These appeals have been consolidated with the appeal and cross-appeal in

Mohamed v. Uber Technologies, Inc., Nos. 15-17533 and 16-15035. See January

27, 2016 Order.


6

on January 4, 2016, in both the Yucesoy and O’Connor cases. ER-26, ER-29. On

January 19, 2016, the District Court issued a second Order, clarifying certain

aspects of its earlier Order, see ER-9, and Uber filed an amended notice of appeal

on the same day. ER-34, ER-40.

The Court has jurisdiction over these appeals and cross-appeals pursuant to

28 U.S.C. § 1292, because the District Court’s Orders have the effect of “granting,

continuing, modifying, refusing or dissolving [an] injunction[].” See 28 U.S.C.

§1292(a)(1). The Court’s December 23, 2015, Order is an injunction, as well as a

denial in part of a requested injunction, appealable under 28 U.S.C. § 1292(a)(1).

STATEMENT OF ISSUES

1. Where Uber distributed a new arbitration agreement to represented class

members and putative class members in direct response to the District Court’s

Order two days earlier that had held Uber’s previous arbitration agreements

unenforceable, and the new agreement purported to waive their rights to

participate in the pending litigation (by “fixing” the issue that had led the

previous arbitration agreement to be held unenforceable), was the District

Court’s decision to invalidate this new arbitration agreement, and enjoin further

ex parte communications with certified class members in the O’Connor action,

a proper exercise of its powers pursuant to Fed. R. Civ. P. 23(d)?

2. Did the District Court, however, err in deciding that modest corrective notice


7

would be sufficient to protect putative class members’ rights, thus allowing

Uber to continue to distribute the new arbitration agreements to putative class

members for cases that had not yet been certified, which were plainly

promulgated in response to developments in the litigation, would effectively

eliminate most putative class members’ ability to participate in already-pending

cases, and would effectively convert pending opt-out class actions into “opt-in”

proceedings, thereby contravening Rule 23?

STATEMENT OF THE CASE

These consolidated appeals and cross-appeals arise from Uber’s actions in

December 2015, in which it distributed new arbitration agreements to class

members and putative class members in pending class action cases just two days

after the District Court had declared Uber’s prior arbitration agreement

unenforceable.

The first of these cases, O’Connor v. Uber Technologies Inc., was filed in

August 2013 in federal court in California as a class action on behalf of individuals

who have worked as drivers for Uber anywhere in the country, alleging that they

have been misclassified as independent contractors and thus did not receive

reimbursement for necessary work-related expenses they have incurred, and also

alleging that they have not received all gratuities which passengers paid for their


8

benefit. ER-900.2 The Yucesoy case was filed in June 2014 in Massachusetts state

court, alleging similar claims under Massachusetts law on behalf of Massachusetts

Uber drivers.3 Both cases are class actions brought on behalf of Uber drivers,

alleging that Uber has misclassified them as independent contractors and violated

2 The case was originally filed on behalf of drivers nationwide (other than in

Massachusetts) under California law. ER-[Dkt 1]. Although the District Court

originally ruled that the case could proceed as a putative national class action,

O'Connor v. Uber Technologies, Inc., 2013 WL 6354534, *4 (N.D. Cal. Dec. 5,

2013), it later reversed course and limited the case to California drivers. O'Connor

v. Uber Technologies, Inc., 58 F. Supp. 3d 989, 1005-06 (N.D. Cal. 2014).

Plaintiffs sought leave to file an interlocutory appeal of this order, but that motion

was denied. See ER-914 (at Dkt. 138), ER-917 (at Dkt. 160). Thus, Plaintiffs in

O’Connor may still appeal, following final judgment, the District Court’s reversal

of its earlier ruling that held that California law could apply to drivers nationwide,

based on Uber’s California choice of law provision that it chose to include in its

contracts with drivers.

In reversing its earlier decision that a nationwide class could be pursued in

this case, the District Court relied on Sullivan v. Oracle Corp., 51 Cal. 4th 1191

(2011), where the California Supreme Court held that California Labor Code

claims did not apply to workers outside of California. However, in Oracle there

was no choice-of-law provision at issue to overcome the ordinary presumption

against extraterritorial application of the California wage laws, and this Court in

Gravquick A/S v. Trimble Navigation Int’l Ltd., 323 F.3d 1219, 1223 (9th Cir.

2003), made clear that, in the absence of an “express geographical limitation[] as to

its application,” a California state statute can “be applied to an out-of-of state

[party] through a choice of law provision in the contract.” Thus, Plaintiffs believe

they have a likelihood of obtaining reversal of the District Court’s decision and

thereby expanding the O’Connor case back to a national class action.

3 The case was later removed to federal court in Massachusetts and

subsequently transferred to Judge Edward M. Chen in the Northern District of

California, the same judge already presiding over O’Connor. ER-1000-01.


9

wage laws as a result.4

Since the O’Connor case was filed more than two and a half years ago, the

parties have engaged in extensive discovery and engaged in a great deal of motion

practice. The District Court ruled on Uber’s Motion to Dismiss and its subsequent

Motion for Judgment on the Pleadings. See ER-906 (at Dkt. 60), ER-910 (at Dkt.

99). The court also had occasion to consider Uber’s Motion for Summary

Judgment (which it denied) and Plaintiffs’ Motion for Class Certification (which it

mostly granted). See O’Connor v. Uber Technologies, Inc., 82 F. Supp. 3d 1133

(N.D. Cal. 2015); ER-432. Likewise, the Yucesoy case has been hotly contested,

and Uber has filed four separate Motions to Dismiss as well as two separate

Motions to Compel arbitration of several of the named plaintiffs. See ER-995 –

1016 (at Dkt. 6, 36, 109, 149, 62, 94).5

On September 1, 2015, the District Court certified the O’Connor case as a

class action. ER-432. However, at that time, the class was limited to drivers whose

work for Uber had ended before June 2014 because the court did not include in the

4 The Mohamed and Gillette cases were filed several months later in federal

court in California, alleging violations of state and federal credit and consumer

reporting laws on behalf of a nationwide class of drivers, and were subsequently

consolidated with one another. ER-962, 983, 972 (at Dkt. 111). 5 Due to procedural delays, including Uber’s removal of Yucesoy to federal

court, transfer of the case to California, and serial filing of four motions to dismiss,

the case has not yet progressed beyond the pleading stage, with discovery only just

now beginning.


10

class those drivers who were bound by Uber’s 2014 or 2015 arbitration clause6

which contained a class action waiver.7 After further briefing and argument

concerning the enforceability of Uber’s 2014 and 2015 arbitration agreements, see

OCONNOR SER-67-119, the District Court ruled on December 9, 2015, that these

arbitration agreements were also unenforceable, and as a result it expanded the

class to include drivers who had accepted those agreements, thus expanding the

certified class to consist of most Uber drivers who have ever worked in California.

ER-340-42, 348-63.

Uber had opposed certification of this expanded class primarily because of

Uber’s 2014 arbitration clause (containing a class action waiver) that it contended

bound all drivers in California that have worked since June 2014. Based on the

court’s invalidation of that arbitration clause on December 9, 2015, the

supplemental class certification order brought more than 240,000 drivers within the

class. (The earlier class certification Order, see ER-432, which included in the

class only those drivers whose work for Uber ended before June 2014 or those

6 Because Uber’s 2014 and 2015 arbitration agreements contain substantially

similar terms, the parties have referred to them both for convenience sake as the

2014 agreement. Throughout this brief, when referring to Uber’s 2014 arbitration

agreement, Plaintiffs intend to include the 2015 agreement as well. 7 The court had previously held Uber’s 2013 arbitration agreement

unenforceable on unconscionability grounds, see ER-50-02, and thus that

agreement did not limit the class certified in the September 1, 2015, class

certification order. ER-432, ER-491-94.


11

drivers who had opted out of the 2014 arbitration clause, included only

approximately 8,000 drivers).8

On December 11, 2015, two days after the District Court issued its

supplemental class certification order in O’Connor, which had vastly expanded the

scope of the class, Uber distributed to its drivers nationwide a newly revised

arbitration clause, which Uber contended “fixed” the problem that had led the

District Court to declare its 2014 arbitration agreement unenforceable (namely its

inclusion of a non-severable PAGA waiver). This new arbitration clause was

clearly intended to limit Uber’s potential liability going forward in already-filed

class cases. It is Uber’s distribution of this newly revised agreement in December

2015 that is the subject of this appeal.

1. Uber’s History of Abusive Use of Arbitration Agreements in This

Litigation.

Just a couple of weeks before the O’Connor case was filed, Uber distributed

to its drivers nationwide a revised contract which included a buried arbitration

provision containing a class action waiver.9 At the outset of the case, Plaintiffs

8 Uber appealed the District Court’s Order which held the arbitration clause

unenforceable, and that appeal is now pending before this Court. See Ninth Cir.

Appeal No. 15-17420. 9 The agreement appeared as a pop-up on drivers’ iPhone screens, just as they

were about to go on duty, prompting them to press a button on their phone’s screen

in order to agree to the terms of Uber’s new driver contract. See OCONNOR-SER-


12

filed an Emergency Motion for Protective Order in an effort to prevent Uber from

continuing to disseminate the agreement to putative class members (and thereby

prevent them from participating in this class action case), now that the case was

pending. ER-901 (at Dkt. 4).10 After full briefing and argument by the parties,

including a motion for reconsideration by Uber, the District Court ultimately

granted in part Plaintiffs’ Motion for Protective Order. See ER-860, 798. The

District Court expressly declined to rule on the enforceability of the agreement at

that time, finding that the issue was not yet ripe, see ER-863, n. 1, and instead

ordered corrective notice be sent to all drivers who received the new agreement

after the case had been filed, to inform them about the effect of the agreement on

152 at ¶5, OCONNOR-SER-121 at ¶5. Drivers could not use the App or work for

Uber until they clicked “Yes, I agree.” See OCONNOR-SER-121-23. The

arbitration agreement provided a 30-day “opt-out” period during which drivers

could choose not to be bound by the arbitration clause if they sent notice in writing

“by a nationally recognized overnight delivery service or by hand delivery” to the

attention of Uber’s General Counsel. See OCONNOR-SER-166. Opting out by

email or even by ordinary mail was not an option, and the opt-out option was

buried deep within the fine print on page 14 of a 15 page agreement, accessible

only on drivers’ iPhones if they clicked a tiny hyperlink. Id. 10 Plaintiffs argued that, because the case was filed during the 30-day period in

which drivers could opt out of the arbitration clause, the District Court has the

power under Rule 23(d) to control communications with putative class members

and thus to enjoin further communications between Uber and its drivers that could

affect their rights in the case.


13

their rights in the pending litigation. ER-870-71.11 This corrective notice informed

drivers about the pendency of the case and provided drivers a modestly less

burdensome means of “opting out” of the arbitration agreement by providing an

email address to which opt-outs could be sent and providing more prominent

notice in the agreement regarding the arbitration clause and opt-out option.12

The District Court eventually confronted the enforceability of the arbitration

agreements in the related Mohamed action, where the court ultimately ruled in an

exhaustive seventy-page opinion that both Uber’s earlier 2013 agreement and its

11 The court made a distinction between drivers who were already working at

the time the case was filed as opposed to drivers who began working later and

would thus receive the arbitration clause after the filing of the case. Though the

initial 2013 arbitration was apparently rolled out in response to another previously

filed class action in Massachusetts, see O'Connor, 2014 WL 1760314, *6 (N.D.

Cal. May 2, 2014) (“[T]he timing of the promulgation of the Licensing Agreement

by Uber …strongly suggests the Agreement was motivated as a response to the

class action suit filed in Massachusetts”), the District Court found it significant that

the distribution of the agreement preceded the filing of the O’Connor case. At

issue in this appeal, however, the December 2015 agreement was admittedly

distributed by Uber in direct response to the District Court’s Order of two days’

prior, and admittedly for the purpose of affecting the rights of putative class

members to participate in claims that had already been filed. ER-72.

12 Contrary to Uber’s characterization, the District Court “did not ‘draft’ or

‘approve’ the substance of the 2014 Agreements,” but rather simply “aided in

drafting a corrective notice,” which was designed to ameliorate the misleading and

abusive nature of Uber’s roll-out of the agreements during the pendency of

litigation. Mohamed v. Uber Techs., Inc., 2015 WL 4483990, *4-5 (N.D. Cal. July

22, 2015) (emphasis in original).

Uber appealed the District Court’s Order regarding corrective notice for the

2013 agreement, and that appeal is pending in this Court as Ninth Cir. Appeal No.

14-16078.


14

later 2014 agreement (which had been re-issued with corrective notice as ordered

by the court), were unconscionable and unenforceable. See ER-500. In

considering a motion to certify the O’Connor class as a class action, and, in

response to additional supplemental briefing and multiple hearings, the District

Court again addressed the 2014 arbitration agreement, and ultimately concluded on

December 9, 2015, that the 2014 arbitration agreement was not enforceable and

thus could not be used to limit the scope of the class in O’Connor. The District

Court based that decision on this Court’s ruling in Sakkab v. Luxottica Retail N.

Am., Inc., 803 F.3d 425, 431 (9th Cir. 2015), that PAGA waivers are

unenforceable under California law and that conclusion is not preempted by the

Federal Arbitration Act. In a detailed decision, the court concluded that the PAGA

waiver contained in Uber’s arbitration agreement is non-severable and thus

rendered the entire agreement unenforceable. ER-348-49. The District Court

engaged in a detailed analysis of the agreement’s severability language and

ultimately concluded that the PAGA waiver could not be cured absent reformation.

In light of its conclusion that the 2014 arbitration agreement was unenforceable

with respect all drivers, the District Court’s December 9, 2015 Order expanded the

previously certified class in O’Connor, see ER-432, to now include all drivers who


15

have worked in California (other than two excluded categories), without reference

to whether they had accepted arbitration clauses. ER-348-363.13

2. The Facts Giving Rise To This Appeal.

Less than forty-eight hours after the District Court held that Uber’s 2014

arbitration clause was unenforceable, and thus that drivers who had previously

been excluded from the class in this case based on the 2014 agreement, see ER-

432, 491-95, could now be members of the certified class in O’Connor (which

expanded the class size from approximately 8,000 to 240,000 drivers), Uber sent

out a new arbitration agreement to its drivers nationwide, which purported to “fix”

the issue that had led the District Court to find the earlier arbitration clause

unenforceable.14 Uber did so without any warning to or communication with class

counsel and in admitted direct response to the District Court’s Order. Uber sent

out this new arbitration agreement to its drivers across the country, including to

members of the certified class in O’Connor as well as putative class members in

Yucesoy (in Massachusetts) and putative class members in O’Connor (in states

13 Uber appealed that Order holding Uber’s 2014 arbitration clause

unenforceable, which is pending with this Court as Ninth Cir. Appeal No. 15-

17420.

14 Specifically, Uber addressed the District Court’s finding that its arbitration

clause contained a non-severable PAGA waiver (which rendered the arbitration

agreement unenforceable after Sakkab), by purporting to revise the agreement and

make the PAGA waiver severable.


16

other than California and Massachusetts, who would be putative class members in

O’Connor should Plaintiffs obtain a reversal of the District Court’s ruling limiting

the case to California drivers). The agreement on its face stated that the arbitration

provision applied to all current cases. ER-288; ER-305 (“this provision will

preclude …you from participating in or recovering relief under any current or

future class, collective, or representative (non-PAGA) action brought against the

Company or Uber by someone else”). Nowhere did this new December 2015

arbitration agreement inform drivers of the District Court’s ruling invalidating the

previous arbitration agreement, which had allowed drivers who would have been

bound by the previous arbitration clauses to participate in these pending cases.15

Plaintiffs’ counsel learned of Uber’s actions when they were contacted by

hundreds of drivers beginning early in the morning on December 11, 2015,

concerned and confused by the new agreement and what effect it had on their right

to participate in the pending cases. ER-285-86. Uber communicated to the press

(but not to class counsel) that it would refrain from using this new agreement to

15 Unlike Uber’s previous effort in 2013 to distribute an arbitration agreement

just before the O’Connor case was filed, here, Uber distributed an arbitration

agreement in the midst of already-filed class actions and in direct response to

developments in the litigation that had just dramatically expanded the size of the

certified class in O’Connor. Although in 2013, Plaintiffs asserted that the court

had the right to invoke its powers under Rule 23(d) because the 30-day opt-out

peiord was still running when the case was filed, here, there is no question that

these pending cases were already on file when Uber rolled out its arbitration

clause.


17

limit the now-certified class in the O’Connor case (though it made no such

representations with respect to the other pending cases, and the agreement on its

face purports to limit all drivers’ right to participate in any class action, including

O’Connor class members). ER-275.16

Moreover, Uber’s misbehavior took place after Uber had already been

chastised by the District Court previously in this litigation for attempting to

“unilaterally limit the size and scope of the class … without being subject to court

supervision,” by sending out earlier arbitration clauses to its drivers. O'Connor v.

Uber Techs., Inc., 2014 WL 1760314, *4 (N.D. Cal. May 2, 2014). Despite the

court’s earlier chastisement, after months of hotly contested briefing and argument

16 When Plaintiffs’ counsel confronted Uber about its decision to send ex parte

legal documents to represented class members (as well as potential class

members), which purported to waive drivers’ right to participate in these cases,

Uber stated that it had the District Court’s permission to do so. Uber was

apparently referring to a brief exchange with Judge Chen in the midst of a 40-

minute hearing in a different case, involving entirely different counsel, at which

class counsel was not present. ER-198:20-199:11; 200. The District Court later

clarified that his understanding from this brief exchange in an entirely different

case “was that when you say going forward and we're talking about the Del Rio

case, that the plan was to promulgate a new perhaps 2017 version or 2016 version

[agreement]… that would apply to new drivers,” and not that Uber would send a

new agreement to class members and potential class members in this litigation.

OCONNOR-SER-11:17 – 12:8. The court further noted that it “did not anticipate

that [the new agreement] would apply to current drivers, certainly not to those in

the class who were on the verge of getting notices out … So whatever your intent

was, I'm going to tell you my intent, and my intent was not to approve and I had no

intent of saying yeah, go ahead and just issue notices to current employees,

including class certified class members.” Id.


18

regarding the enforceability of Uber’s arbitration clause, and notwithstanding the

fact that the litigation was now much farther advanced, Uber took it upon itself to

send another arbitration agreement to its drivers that clearly sought to limit its

liability in pending cases by ensuring that most drivers would not be able to

participate in them based upon a class action waiver in the agreement.

SUMMARY OF THE ARGUMENT

In this case, Uber issued a revised arbitration agreement to its drivers, which

purported to strip drivers of their right to participate in pending class action cases

brought on their behalf – a right which had only just been recognized by the

District Court two days earlier when it held Uber’s prior arbitration agreement to

be unenforceable. Uber sent this revised agreement to represented class members

in the O’Connor action, as well as to potential class members, such as the putative

class in Yucesoy (and the broader potential class in O’Connor, should Plaintiffs

there prevail on their appeal of the District Court’s Order limiting the case to

California). It did so in clear response to the District Court’s Order, issued just two

days before, holding Uber’s prior arbitration clause unenforceable, and without any

clear explanation of the effect of the new agreement on drivers’ newly affirmed

right to participate in these pending cases.

Uber’s actions constitute an improper attempt to “diminish the size of the

class and thus the range of potential liability,” by attempting to avoid the court’s


19

recent ruling that Uber’s previous arbitration agreements were unenforceable.

Kleiner v. First Nat’l Bank of Atlanta, 751 F.2d 1193, 1202 (11th Cir. 1985). Rule

23 entrusts courts with broad authority to exercise control over class actions,

including communications between defendants and potential class members. See

Gulf Oil, 452 U.S. at 99-101 (“Because of the potential for abuse, a district court

has both the duty and the broad authority to exercise control over a class action and

to enter appropriate orders governing the conduct of counsel and parties”); see also

Wang, 623 F.3d at 755; Balasanyan, 2012 WL 760566, *3. “Courts applying the

Gulf Oil standard have found that ex parte communications soliciting opt-outs, or

even simply discouraging participation in a case, undermine the purposes of Rule

23 and require curative action by the court.” Guifu Li v. A Perfect Day Franchise,

Inc., 270 F.R.D. 509, 517 (N.D. Cal. 2010). Thus, the District Court was carrying

out its duty to protect the integrity of the class action process and acted well within

the scope of its Rule 23(d) powers when it invalidated the misleading agreement

and required Uber to obtain court approval before sending any further agreements

or communications that would affect drivers’ right to participate in these pending

cases. See infra, Part II.

However, while the District Court properly held that no further arbitration

agreements could be sent to class members in the O’Connor case (and that the new

arbitration clause would not apply to member of the certified O’Connor class), it


20

erred in allowing Uber to continue sending out revised arbitration agreements to

putative class members, such as the Massachusetts drivers who are potential class

members in the Yucesoy case (and drivers outside California and Massachusetts

who are potential class members in O’Connor, should Plaintiffs win their appeal of

the District Court’s Order limiting the case to California),17 thereby cutting off

their right to participate in pending litigation. While ordering Uber to send

corrective notice if it wanted to distribute new arbitration agreements that would

affect these drivers’ rights was plainly within the District Court’s authority under

Rule 23(d), the District Court erred by concluding that merely providing a

corrective cover letter to putative class members was sufficient to protect these

drivers’ rights. Allowing Uber to continue to send out these agreements to putative

class members going forward permits Uber to essentially convert the Rule 23 opt-

out mechanism into an opt-in mechanism by limiting putative classes in already

pending (though not yet certified) cases to only those drivers who take affirmative

measures to opt out of Uber’s revised arbitration clause. Moreover, the

promulgation of these revised agreements cannot merely be said to be an ordinary

business communication, but instead are an obvious and admitted response to the

Court’s recent rulings in this ongoing litigation. Uber’s actions in distributing

17 Likewise, Uber’s distribution of arbitration agreements to drivers outside

California also affected the rights of putative class members in the Mohamed and

Gillette cases, which are members of putative national class actions on credit

reporting claims.


21

these agreements simply constitutes a transparent attempt to “unilaterally limit the

size and scope of the class … without being subject to court supervision.”

O'Connor v. Uber Techs., Inc., 2014 WL 1760314, *4 (N.D. Cal. May 2, 2014).

Uber should not be permitted to evade the Court’s jurisdiction and continue its

campaign to unwittingly ensure that drivers cannot participate in ongoing class

litigation by repeatedly sending out revised arbitration agreements to putative class

members. For all of these reasons, the District Court should have granted

Plaintiffs’ Emergency Motion for Protective Order in its entirety, and should have

barred Uber from promulgating any future arbitration agreements that could limit

the ability of drivers to participate in pending class litigation – including not only

certified class members in O’Connor, but also to putative and potential class

members in Yucesoy, and O’Connor (and other already-filed class cases such as

Mohamed).

ARGUMENT

I. The Standard of Review.

“This Court reviews a district court’s grant of a preliminary injunction” as

well as the scope of such an order, “for abuse of discretion.” United States v.

Schiff, 379 F.3d 621, 625 (9th Cir. 2004) (citing United States v. Estate

Preservation Servs., 202 F.3d 1093, 1097 (9th Cir. 2000); Idaho Watersheds Project

v. Hahn, 307 F.3d 815, 823 (9th Cir. 2002). “A trial court abuses its discretion if it


22

bases its decision on ‘an erroneous legal standard or on clearly erroneous factual

findings.’” Schiff, 379 F.3d at 625.

II. The District Court Acted Well Within Its Rule 23 Powers In

Invalidating Uber’s Arbitration Agreement With Respect To Members

of The O’Connor Certified Class And In Requiring Approval of Future

Communications with Class Members and Putative Class Members.

The District Court’s decision to bar Uber from sending further arbitration

agreements to certified class members in the O’Connor action was well within its

Rule 23(d) powers, and indeed, should have been extended to include all potential

class members in the pending class cases as well.18 Thus, in the face of Uber’s

coercive and misleading campaign to use arbitration agreements to drastically limit

its potential liability in pending class cases, the District Court’s Order did not even

approach the outer limits of its authority. Contrary to Uber’s contentions, the

District Court’s decision to invalidate the agreement and bar further

communications absent court supervision properly complied with Gulf Oil’s

dictates, relying upon “a clear record and specific findings” regarding the abusive

and misleading nature of Uber’s dissemination of its December 2015 arbitration

agreement to class members and putative class members. Gulf Oil Co., 452 U.S. at

90. In Gulf Oil, the Supreme Court recognized that “[b]ecause of the potential for

18 Uber agreed at the hearing below on Plaintiffs’ Emergency Motion for

Protective Order that it would not seek to enforce its December 2015 arbitraton

agreement against certified O’Connor class members. However, as the District

Court noted in its Order, the December 2015 agreement on its face did not indicate

this limitation. ER-4.


23

abuse, a district court has both the duty and the broad authority to exercise control

over a class action and to enter appropriate orders governing the conduct of

counsel and parties.” 452 U.S. at 100. Specifically, Gulf Oil requires that:

[A]n order limiting communications between parties and potential class

members should be based on a clear record and specific findings that reflect

a weighing of the need for a limitation and the potential interference with the

rights of the parties…In addition, such a weighing—identifying the potential

abuses being addressed—should result in a carefully drawn order that limits

speech as little as possible, consistent with the rights of the parties under the

circumstances.

Id. at 100.19

Here, the District Court’s Order reflects such a weighing and is based on a

clear record and specific findings regarding the detrimental effects of Uber’s

19 Once a class is certified (as is the case with respect to the certified class

members in O’Connor), the District Court’s mandate to oversee abusive

communications by defendants is even stronger. See Kleiner, 751 F.2d at 1207, n.

28 (noting that “[a]t a minimum, class counsel represents all class members as

soon as a class is certified” such that “[t]he court below correctly concluded that

the solicitation of exclusions constitutes a ‘per se’ abuse.”). But courts clearly

have this power and duty as well with respect to pending class cases that have not

yet been certified. See Mevorah v. Wells Fargo Home Mortg., 2005 WL 4813532,

*3 (N.D. Cal. 2005) (applying Gulf Oil analysis to precertification communications

by defendant to potential class members without regard to the fact that no motion

for class certification was filed); Keystone Tobacco Co., Inc. v. U.S. Tobacco Co.,

238 F. Supp. 2d 151, 154 (D.D.C. 2002) (Rule 23 provides authority for court to

regulate communications between a party and class members, even before a class

has been certified); Basco v. Wal-Mart Stores, Inc., 2002 WL 272384 (E.D. La.

Feb. 25, 2002) (“[W]here an alleged class action has been filed but certification has

not yet been decided, a court may issue a limitation on ex parte contact under Rule

23, if it is clear the defendant is attempting to engage in conduct which would

undermine the purposes of the rule.”).


24

promulgation of the December 2015 agreement. The District Court reviewed the

plain text of the agreement (which on its face purports to prevent drivers from

participating in pending class cases), the manner in which it was presented (in

“direct response to the Court’s rulings in the ongoing class action litigation” and

not as part of a “purely [] isolated business decision,” see ER-4), as well as a

declaration from counsel attesting that within twelve hours of Uber sending out the

new agreement, she had received “between 100-200 inquiries from Uber drivers

who are concerned, dismayed, and confused about the new arbitration agreement

distributed to drivers this morning.” ER-275, n. 1.

Relying upon these facts, the District Court found that: (1) recent

developments in the litigation “increase[d] the complexity of the legal landscape

surrounding the Uber litigation, and may have an impact on drivers’ evaluation of

the benefits of arbitration versus litigation,” (2) the December 2015 agreement

impermissibly purported to waive the claims of members of the certified class in

O’Connor, and (3) there was “evidence that it has in fact led to considerable

confusion among the drivers.” ER-3. Based on these findings, the District Court

relied on its Rule 23(d) powers to craft an Order that invalidated the agreements,

and required approval by the Court or class counsel for future communications

with class members and putative class members that affect their rights in the

litigation. However, if anything, the District Court’s Order was overly cautious


25

and too narrowly tailored, in that it limited the ban on sending further revised

arbitration agreements to the certified class members in O’Connor, thereby

allowing Uber to continue sending new arbitration agreements to potential class

members in other pending, but not yet certified, class cases. 20 Indeed, the District

Court’s Order was particularly warranted in light of Uber’s continued pattern of

misusing arbitration, as the District Court had already deemed Uber’s prior

promulgation of its arbitration agreement to be misleading and abusive under Rule

23, see ER-860-71, and unenforceable under unconscionability and public policy

doctrines. ER-500, ER-340. Thus, insofar as the District Court’s Order barred Uber

from sending further arbitration agreements or other such communications to

O’Connor class members, it plainly complied with the dictates of Gulf Oil, and in

fact, should have been extended to lend the same protection to putative class

members in other pending cases.

Uber argues that the District Court relied “entirely on a single paragraph of

inadmissible hearsay from the declaration of plaintiffs’ lead counsel” as the basis

20 Instead, the District Court merely required that Uber include a modest

corrective notice when it re-issued the agreement to putative class members in the

Yucesoy case as well as potential (but not currently certified) class members in

O’Connor (including drivers outside California for whom the court declined to

even provide corrective notice that their rights could be affected by O’Connor).

ER-6-7, 9-10 (rejecting Plaintiffs’ proposal to explain to drivers that O’Connor had

been filed as a nationwide class action, which would have informed drivers

nationwide that their rights could be at stake in this litigation). Plaintiffs note that

ordering Uber to issue corrective notice was well within the District Court’s Rule

23(d) powers. See, supra, n. 19.


26

for its Order, such that there was no clear record on which to base the Order. Br. at

27. Uber is incorrect for several reasons. First, Plaintiffs did include declarations

from two drivers as attachments to counsel’s declaration, which show the drivers’

misunderstanding that they had no choice but to agree to arbitrate in order to keep

driving for Uber. ER-288-89, ER-313-14. Second, in exigent circumstances such

as these, it is entirely appropriate for the Court to rely on a declaration from

counsel, and indeed, courts have routinely relied on declarations from counsel as

the basis for Rule 23(d) orders that limit communication with class members. See

Camp v. Alexander, 300 F.R.D. 617, 623 (N.D. Cal. 2014); Wright v. Adventures

Rolling Cross Country, Inc., 2012 WL 2239797, at *4 (N.D. Cal. June 15, 2012).

Moreover, the District Court based its assessment not only on the declaration, but

on the circumstances of Uber’s behavior, noting that “[t]here can be little doubt

that the purpose of the new Agreement is not purely an isolated business decision

but one which is informed by Uber’s litigation strategy,” given that it was

promulgated less than two days after the Court invalidated the previous arbitration

agreement, and purported to nullify the effects of that Court Order (at least for not-

yet-certified cases). ER- 4. Indeed, the agreement was plainly aimed at

undercutting the District Court’s recent decision finding Uber’s prior agreement

invalid, and was an attempt to “diminish the size of the class and thus the range of

[Uber’s] potential liability.” Kleiner, 751 F.2d at 1202. Uber distributed the


27

agreement without informing drivers that the District Court had just ruled that

Uber’s prior agreement was invalid and that they could now participate in these

pending cases. The District Court recognized that material changes in the posture

of the cases rendered Uber’s actions misleading, deceptive, and confusing to

drivers and properly found that “[b]ecause the legal landscape has become

materially more complicated for the drivers, it is imperative that drivers be given

clarity, and that the ability of drivers to opt out at this juncture be clear and non-

cumbersome.” ER-4.

Uber further argues that counsel’s declaration “does not explain … why the

[December 2015] Arbitration Provision was suddenly more confusing that the

(virtually identical) Arbitration Provision” Uber had sent out previously. Br. at 27

(emphasis in original). Uber contends that the District Court had no justification

for invoking Rule 23(d) because Uber’s revised December 2015 agreement was

substantially similar to the earlier agreements it had sent to drivers previously. Br.

at 26. This argument willfully ignores the obvious consequences of Uber’s actions

and the District Court’s own explanation; Uber sent out the December 2015

agreement two days after the District Court had ruled that its prior agreement was

unenforceable and thereby expanded the certified class in O’Connor, but Uber

made no mention of this new ruling or how accepting this revised arbitration

agreement would affect drivers’ standing in the pending cases now that the prior


28

agreement had been ruled unenforceable. In other words, less than two days after a

federal court ordered that drivers could participate in several pending class action

cases, Uber sent a revised arbitration agreement that purported to strip away that

right, without even informing drivers that a Court had conferred it in the first place.

To suggest that this communication was not misleading and deceptive is simply

untenable. The District Court explained as much in its Order, noting that “drivers

who failed to opt out of [Uber’s prior arbitration] agreements may still believe they

are required to arbitrate and thus pay little heed to the opt out provisions of the new

arbitration agreement,” not realizing that the prior agreements have now been

found unenforceable. ER- 3. See also OCONNOR-SER-16:12-17 (“It may be the

case that some people who failed to opt out, not fully understanding that they are

not bound at least as we sit here right now applying those early arbitration

agreements, may say -- may pay little heed to the new arbitration agreement

because they may think well, I didn't -- I didn't opt out. I'm stuck. Well, maybe

they are not stuck. We will find out.”).21

21 Moreover, while Uber suggests that the “December 2015 Agreement was the

same as the Arbitration Provision Uber was issuing to drivers … with the district

court’s blessing” earlier in the case, this is a gross mischaracterization of the

record. Br. at 26 (emphasis in original). Contrary to Uber’s characterization, the

District Court did not “bless” the prior agreements. Indeed, the Court “did not

‘draft’ or ‘approve’ the substance of the 2014 Agreements,” but rather simply

“aided in drafting a corrective notice,” which was designed to ameliorate the

misleading and abusive nature of Uber’s roll-out of the agreements at the particular


29

Moreover, as Plaintiffs clearly explained below, because class members in

O’Connor would “soon receive class notice … and will learn they have the right to

‘opt out’ of the class,” Uber’s communication and the “public discussion that has

now ensued regarding ‘opting out’ of the arbitration clause” would lead many

drivers to “misunderstand and believe they need to ‘opt out’ in order to be covered

by the [class action] case.” ER- 275, n. 1. This issue further exacerbated the

confusing and misleading nature of Uber’s communication to class members.22

Next, Uber argues that “there could be no likelihood of serious abuses

justifying a Rule 23(d) order” for O’Connor class members because Uber

disclaimed any intent to enforce the December 2015 agreement to limit the rights

time and in the particular context in which they were originally sent. Mohamed,

2015 WL 4483990, *4-5 (emphasis in original). To suggest that the District

Court’s previous Order for corrective notice somehow gave Uber an unlimited

license to distribute new arbitration agreements to class members going forward is

plainly incorrect.

22 Uber claims that its December 2015 agreement must not have been

misleading because a number of drivers did in fact opt out of the arbitration clause.

Br. at 27-28. However, it seems obvious that many of these drivers were those

who contacted Plaintiffs’ counsel, expressing confusion and dismay (and who then

learned they should opt out in order to preserve their rights to participate in the

pending class actions). ER-285-89; OCONNOR-SER-51. However, for the

countless drivers who did not know to contact Plaintiffs’ counsel, there is no

telling what effect Uber’s communication might have had. Indeed, that is the

point; the Court is supposed to oversee communications with class members that

affect class members’ rights in the litigation, and it was patently improper for Uber

to unilaterally send such a communication without consulting Plaintiffs’ counsel or

the Court.


30

of class members with respect to the claims that were certified in this case. Br. at

28. However, Uber did not include this limitation in the new agreement, and a

class member receiving Uber’s new agreement would have absolutely no reason to

know that Uber has apparently agreed not to invoke the new arbitration agreement

with respect to the O’Connor action. The District Court recognized as much in its

Order, when it invalidated the agreement and prohibited Uber from sending any

further arbitration agreements to class members in O’Connor. ER-4 – ER-5 (“Uber

contends that it does not intend to invoke the new agreement against the members

of the certified class as to certified claims up to the date of class certification;

however, the new arbitration agreement does not reflect this limitation”).

Indeed, less than a month later, Uber had already walked back its prior

position and argued that any future arbitration agreements it issues “should be

enforceable vis-à-vis all class members…including members of the certified

O’Connor class.” See OCONNOR-SER-2. Uber’s behavior makes clear that,

absent Court supervision, it cannot be trusted to communicate forthrightly with its

drivers regarding the pending litigation and their rights. Indeed, Uber did not even

inform or consult class counsel about the December 2015 arbitration agreement

until many hours after the agreements had already been sent to the class. In fact, it

is not clear when Uber’s counsel would have deigned to inform Plaintiffs’ counsel

of its intentions at all, had she not been flooded with calls and emails from


31

concerned and confused drivers, prompting her to reach out to Uber’s counsel.23

This behavior alone demonstrates Uber’s contempt for the protections that Rule 23

imposes on the class action process.24 Following the District Court’s orders on

class certification, Plaintiffs’ counsel are now the legal representatives of the

O’Connor class and they should at the very least have been consulted before their

clients were sent legal documents that purport to waive their right to participate in

the case. The District Court was entitled to take note of this fact and to issue an

order preventing Uber from showing the same disregard in the future, by requiring

prior approval of the Court or class counsel before Uber sends communications to

23 Indeed, Plaintiffs’ counsel was forced to learn about Uber’s intentions from

statements in the press, before she ever received an explanation from Uber. ER-

274 – ER-275.

24 “[C]ourts have held that, ‘once a class has been certified, the rules governing

communications [with class members] apply as though each class member is a

client of the class counsel.’” Harris v. Vector Mktg. Corp., 716 F. Supp. 2d 835,

847 (N.D. Cal. 2010) (quoting Manual of Complex Litig. § 21.33, at 300 (4th ed.

2004)); see also Parks v. Eastwood Ins. Servs., 235 F.Supp.2d 1082, 1083

(C.D.Cal.2002) (stating that, “[i]n a class action certified under Rule 23, ... absent

class members are considered represented by class counsel unless they choose to

‘opt out’”); Jacobs v. CSAA Inter-Ins., 2009 WL 1201996, *3 (N.D. Cal. May 1,

2009).

However, even before a class is certified, courts have power to exert control

over communciations with putative class members during the pre-certification

stage. See, e.g., Mevorah v. WellsFargo Home Mortg., 2005 WL 4813532, *3

(N.D. Cal. 2005); Keystone Tobacco Co., Inc., 238 F. Supp. 2d at 154; Basco,

2002 WL 272384 at *3; Hampton Hardware, Inc. v. Cotter & Co., 156 F.R.D. 630,

634 (N.D.Tex.1994) (limiting the defendant’s communications with class members

prior to certification); Haffer v. Temple Univ. of Commonwealth Sys. of Higher

Educ., 115 F.R.D. 506, 512 (E.D.Pa.1987).


32

the class in the future, and by barring any further arbitration agreements from

being sent to O’Connor class members during the pendency of the case.

Uber insists that the District Court’s decision to require Uber to obtain prior

approval from the Court or class counsel before sending out future agreements to

drivers was a violation of its First Amendment rights and constitutes “an

unprecedented restraint that finds no basis in Rule 23(d) or existing case law.” Br.

at 23. This is simply not the case. Indeed, Gulf Oil expressly provides for

limitations on speech under the First Amendment, when a Court determines that

the balance between “the need for a limitation and the potential interference with

the rights of the parties,” requires it. 452 U.S. at 101. Thus, Courts have routinely

exercised their powers under Rule 23(d) to limit communications with class

members (or putative class members)25 going forward, and to require Court

25 Indeed, Gulf Oil itself is explicit that this power extends to communications

with potential class members such as the putative class members in the Yucesoy

case. Gulf Oil Co., 452 U.S. at 104 (“We recognize the possibility of abuses in

class-action litigation, and agree with petitioners that such abuses may implicate

communications with potential class members”) (emphasis added). See also supra,

n. 19. Likewise, courts have the power under Rule 23(d) to exercise control over

communications with potential class members for whom the Court has denied class

certification without prejudice. See Cty. Of Santa Clara v. Astra USA, Inc., 2010

WL 2724512, *3 (N.D. Cal. July 8, 2010) (where class certification had been

initially denied, but could still be raised later in the litigation, the Court still found

communications with putative class members to be misleading and improper).

Thus, the District Court also had the power to regulate communications with

respect to putative class members who Plaintiffs have previously sought to include


33

approval before sending future communications. See, e.g., In re Initial Pub.

Offering Securities Litig., 499 F. Supp. 2d 415, 421 (S.D.N.Y. 2007) (holding that

“before Bechtold may issue any class-wide communication or press release, he

must submit to the Court a copy of the communication for in camera review); Belt

v. Emcare, Inc., 299 F. Supp. 2d 664, 669 (E.D. Tex. 2003) (citing to Gulf Oil in

FLSA case and enjoining “all Defendants from making any ex-parte

communications with absent class members regarding this action until the end of

trial”); Buck v. Republic Services, Inc., 2013 WL 2321784, *2 (E.D. Mo. May 28,

2013) (“[T]he Court orders Defendants to provide notice to Plaintiffs' counsel of

any written communication they intend to send potential class members three days

prior to sending the communication. Plaintiffs will then will have three days to file

a motion with the Court addressing any concerns”); Recinos-Recinos v. Express

Forestry, Inc., 2006 WL 197030, *14 (E.D. La. Jan. 24, 2006) (ordering that

“defendants and their agents shall refrain from any unilateral communications with

plaintiffs, opt-in plaintiffs, potential plaintiffs and/or their families regarding the

captioned litigation” pending the Court’s ruling on class certification) (emphasis in

original); Jack Faucett Associates, Inc.. v. Am. Tel. and Tel. Co., 1985 WL 6267,

in the O’Connor case (such as drivers from other states if they are successful on

their appeal, or California drivers that the District Court excluded from the

certified class because they drove through third-party transportation companies or

under corporate names).


34

at *1 (D.D.C. Sept. 30, 1985) (ordering that defendant “shall not directly or

indirectly seek to contact, through the United States mail or any other mode of

communication, any class member … concerning this litigation without prior

approval of the Court”). Like all of these courts, the District Court weighed Uber’s

First Amendment rights against the other interests at stake, as required by Gulf Oil,

and found that restrictions on Uber’s further communications were warranted.26

26 Uber also argues that the District Court’s requirement that corrective notice

accompanying future arbitration agreements sent to potential class members must

include a “push button” hyperlink to the opt-out email address, is “bizarre” and

“bear[s] no relationship to the alleged confusion” caused by Uber’s actions. Br. at

31. While Plaintiffs’ maintain that the corrective notice is inadequate to protect

potential class members and that Uber should be barred entirely from sending

further agreements to potential class members, with or without corrective notice,

see infra, Part III, Uber’s attack on the corrective notice is entirely unwarranted.

The District Court’s Order simply requires a clear and concise cover letter,

explaining “the current legal landscape,” and providing a “renewed opportunity to

opt out.” ER-6. Contrary to Uber’s arguments, the District Court’s goal of

minimizing confusion was well served by its Order requiring a “succinct”

corrective cover letter and “easily accessible opt-out function” that is embedded

right in the cover letter, see ER-7; the District Court obviously recognized that

confused drivers needed to be provided with a clear and concise explanation of

Uber’s agreement and its effect on their rights in light of the current posture of the

litigation. Requiring Uber to place an opt-out hyperlink in the body of a one-page

email was intended to enhance the chances that drivers would actually read and

understand the corrective notice and how to participate in the litigation if they

choose to do so. Nothing about this process “encourage[s] drivers to make an

uninformed decision to opt out of arbitration,” Br. at 36, and indeed, it would be

entirely unnecessary to send this corrective cover letter at all if the District Court

did not now have to unwind the confusion caused by Uber’s improper

communications. The cover letter simply provides drivers with information and a

clear, easy way to participate in the litigation, and unless Uber’s real goal is dupe


35

The First Amendment cases that Uber cites in support of its position, see Br.

at 31, do not even mention Gulf Oil or Rule 23 and instead involve political

speech. As such, these cases are simply inapposite. When viewed in the context

of Gulf Oil’s weighing test, Uber’s hyperbolic assertions about its First

Amendment rights ring hollow. Thus, in light of this authority and Uber’s pattern

of disseminating abusive and misleading arbitration agreements during this

litigation, it is clear that the District Court acted well within the purview of its Rule

23 powers in requiring that Uber refrain from sending any further arbitration

agreements to O’Connor class members and seek prior Court approval before

sending further communications that affect these drivers’ rights.

III. The District Court Erred In Holding That Uber Could Limit the Scope

of Other Putative Classes, For Cases Already Filed, By Sending Out

New Arbitration Agreements That Purported to “Fix” The Invalidity

That Led The Court to Hold The Previous Arbitration Clause Invalid.

While the District Court clearly had the power to oversee communications

with class members and putative class members and to require the issuance of

corrective notice, the Court erred in denying in part Plaintiffs’ Emergency Motion

for Protective Order, and thereby allowing Uber to continue distributing arbitration

agreements to potential class members in these already-filed cases going forward.

As noted earlier, there are several categories of “potential” class members at issue

drivers into agreeing to arbitration, it is unclear how providing a “push-button” opt

out mechanism would cause any harm to Uber at all.


36

here. First, there are those drivers who are putative class members in the Yucesoy

case (Uber drivers who have driven for Uber in Massachusetts). Second, Plaintiffs

in O’Connor originally filed the case as a national class action, and they have

reserved the right to appeal the District Court’s decision to limit the case to

California (as well as the Court’s decision to exclude from the class those drivers

who drove under corporate or fictitious names or through third party transportation

companies in California, see ER-498, 344-48]). These individuals continue to be

potential class members in the O’Connor litigation, and by sending out its

arbitration agreement to these drivers, Uber effectively unilaterally cut off

Plaintiffs’ ability to appeal these issues for the vast majority of these putative class

members (who as a practical matter, will not opt out of an arbitration agreement,

no matter how informative the corrective notice may be). Thus, the District Court

should have enjoined enforcement of Uber’s new agreement, not only with respect

to members of the certified class in O’Connor, but also with respect to putative

class members who Plaintiffs have previously sought to include in the O’Connor

case as well. See County Of Santa Clara, 2010 WL 2724512, *3 (where class

certification had been denied, but could still be raised later in the litigation, the

Court still found communications with putative class members to be misleading

and improper).


37

Thus, it was error for the District Court to distinguish between members of

the certified class in O’Connor and potential class members in Yucesoy and

O’Connor (as well as other pending class cases, such as Mohamed) and to allow

Uber to continue sending arbitration agreements to potential class members going

forward. Because the arbitration agreements would require drivers to take action

to opt out of the agreements, so as to be covered by already pending class cases,

the District Court’s Order effectively allows Uber to convert these opt-out Rule 23

class actions into opt-in proceedings and thereby permits Uber to limit its own

liability from pending class claims by drastically reducing the scope of those

potential classes.

Numerous courts have held that where an employer, during the pendency of

class litigation, distributes to putative class members documents that could impact

the legal rights of employees in that litigation, the court should exercise its powers

pursuant to Rule 23(d) to ensure that those documents do not undermine the rights

of the putative class members. See, e.g., Kleiner, 751 F.2d. at 1202-03 (upholding

district court’s invalidation of opt-out forms obtained through ex parte phone calls

to defendant bank’s customers); Slavkov v. Fast Water Heater Partners I, LP, 2015

WL 6674575, *2, *7 (N.D. Cal. Nov. 2, 2015) (noting that “Courts in this district

have limited communications, as well as invalidated agreements that resulted from

those communications, when they omitted critical information or were otherwise


38

misleading or coercive” and holding “settlement releases signed by a putative class

members … are invalid”); Guifu Li, 270 F.R.D. 509 (refusing to enforce opt-outs

signed by employees during the pendency of a class action suit); Wang v. Chinese

Daily News, 236 F.R.D. 485, 489 (C.D. Cal. 2006) (invalidating signed opt-out

forms obtained by defendant employer during workplace meetings); County of

Santa Clara v. Asta USA, Inc., 2010 WL 2724512, *4 -*6 (N.D. Cal. 2010)

(refusing to enforce releases of putative class members in a consumer class action

through an “accord and satisfaction” which did not contain an explanation of

plaintiffs’ theory of the case or contact information for plaintiffs’ counsel);

Freidman v. Intervet Inc., 730 F. Supp. 2d 758, 764 (N.D. Ohio 2010) (invalidating

settlement releases obtained from putative class members that failed to clearly

advise them that they were giving up the right to participate in putative class

action).27

27 These courts have also recognized that the risk of coercive solicitation of

opt-outs and releases is particularly acute in the context of employment

relationships, which Plaintiffs here contend is the relationship between Uber and

its drivers (and which the District Court has already held presumptively is the

relationship, see O'Connor v. Uber Techs., Inc., 82 F. Supp. 3d 1133, 1145 (N.D.

Cal. 2015) (“[T]he Court has determined that the Plaintiffs are Uber's presumptive

employees…”). See, e.g., Brown v. Mustang Sally’s Spirits & Grill, Inc., 2012 WL

4764585 (W.D.N.Y. Oct. 5, 2012) (“Where defendants are also the employers of

potential class action plaintiffs, the workplace relationship with the employees and

their knowledge of sensitive information about current and former employees, put

them in a position to exercise strong coercion in connection with potential class

members’ decisions . . . .”); Austen v. Catterton Partners V, LP, 831 F.Supp.2d.

559, 568 (D. Conn. 2011) (“[W]hen the defendant is in an ongoing, current


39

Courts have recognized that, when class litigation is pending, Rule 23(d)

permits them to supervise any communications with putative class members that

could affect their rights. These communications include documents that purport to

have the class members opt out of the litigation, or release their claims, or agree to

arbitration clauses that would also prevent them from participating in the litigation.

Indeed, where arbitration agreements strip a putative class member of the right to

participate in pending class action litigation, the arbitration agreement functions

effectively the same as ex parte releases or class opt-out forms solicited by

defendants, and these have all been routinely invalidated by courts. The

distribution of arbitration agreements (containing class waivers) distributed in the

midst of a pending class class deprives potential class members of their right to

participate and recover in the case without their having to take any action – which

is the point of a class action. See infra, Part III.A. Thus, such agreements

effectively eliminate the ability of most class members to obtain relief sought in

the case because, as the defendant well knows, as a practical matter, few class

members will pursue individual arbitrations.

business relationship with members of a putative class, for example an

employment relationship, it may be prudent to preempt the defendant’s ability to

use that relationship and pressure class members to make factual concessions or

settle claims”); A Perfect Day Franchise, Inc., 270 F.R.D. at 517-19; Ralph

Oldsmobile Inc. v. General Motors Corp., 2001 WL 1035132, at *2 (S.D.N.Y. Sep.

7, 2001); Burrell v. Crown Cent. Petroleum, Inc., 176 F.R.D. 243, 244 (E.D. Tex.

1997).


40

Thus, courts have refused to enforce arbitration clauses in agreements which

are distributed to employees during the pendency of litigation and which

negatively impact these putative class members’ right to participate in an already-

pending case. See, e.g., Billingsley v. Citi Trends, Inc., 560 F. App'x 914, 919

(11th Cir. 2014) (refusing to enforce agreements distributed after filing of a

collective action); Russell v. Citigroup, Inc., 748 F.3d 677, 680 (6th Cir. 2014)

(refusing to enforce an arbitration agreement signed by a plaintiff in an ongoing

lawsuit where the plaintiff understandably “expected the contract to apply only to

future lawsuits” and the agreement was presented directly to the represented

litigant and not through his counsel); Jimenez v. Menzies Aviation Inc., 2015 WL

4914727, *6 (N.D. Cal. Aug. 17, 2015) (refusing to compel arbitration of putative

class members where new arbitration policy was disseminated during the pendency

of the class action and noting that “[a]t best, ….[the] new arbitration policy raises

the specter of interference with the rights of … putative class members; at worst, it

was a deliberate effort to undermine pending class litigation”); Balasanyan v.

Nordstrom, 2012 WL 760566 (S.D. Cal. Mar. 8, 2012) (invalidating new

arbitration agreement with a class waiver, distributed during pendency of a class

action); Espinoza v. Galardi S. Enterprises, Inc., 2015 WL 9592535, *3 (S.D. Fla.

Dec. 31, 2015) (refusing to enforce arbitration agreements distributed during the

pendency of an FLSA collective action); Piekarski v. Amedisys Illinois, LLC, 4 F.


41

Supp. 3d 952, 956 (N.D. Ill. 2013) (refusing to enforce arbitration agreements

distributed during the pendency of case); Williams v. Securitas Sec. Serv. USA,

Inc., 2011 WL 2713741, *2 (E.D. Pa. July 13, 2011) (same); In re Currency

Conversion Fee Antitrust Litigation, 361 F.Supp.2d 237 (S.D.N.Y. 2005) (refusing

to enforce arbitration agreements distributed during the pendency of case);

Carnegie v. H&R Block, Inc., 180 Misc.2d 67, 70 (N.Y.S.C. Jan. 7, 1999)

(refusing to enforce arbitration agreements signed by potential class members after

the lawsuit was filed). These cases recognize that arbitration agreements can act

similarly to releases or class opt-outs by taking away potential class members’

right to participate in a pending case. Their inability to participate in pending class

litigation effectively deprives them of the ability to obtain relief because, as

defendants well know, few employees will be able to, or as a practical matter will

actually pursue individual arbitrations.

That an arbitration agreement promulgated during the pendency of litigation

includes an opt-out provision (as Uber’s does here), really makes no difference.

Particularly where the agreement does not adequately disclose the consequences of

failing to opt out of arbitration (i.e. that plaintiffs may waive their rights in pending

litigation), or where the opt out mechanism is too unreasonable and burdensome,

the opt-out right does not protect the putative class members’ rights. See Piekarski,


42

4 F. Supp. 3d at 956; Securitas, 2011 WL 2713741, *2 (refusing to enforce

arbitration agreement imposed during pendency of putative class action).

However, even when a defendant includes a clear and non-burdensome opt-

out mechanism, the distribution of arbitration clauses with opt-out provisions

effectively converts a pending class case from an opt-out class action under Rule

23 into an opt-in proceeding, because it requires the class member to affirmatively

take action in order to have their rights vindicated in the case, as opposed to the

Rule 23 opt-out process, whereby class members need not take any action to have

their rights vindicated. Thus, by distributing such agreements, employers can

effectively convert a Rule 23 opt-out process to an “opt-in” process, albeit without

any supervision or approval by the court. See infra, Part III. A. Thus, in doing so,

the defendant is usurping the court’s role as the overseer of the class action process

as provided for in Rule 23. Id. at *4 (“Securitas's proposal to allow its [] employees

a second 30–day opt out period if the court conditionally certifies a class is also

insufficient because it is for the court, not Securitas, to determine the amount of

time employees shall have to consider their right to join this action”) (emphasis

added). Likewise, where the defendant has disseminated arbitration agreements as

part of a clear litigation strategy to thwart participation in the case and limit its own

liability, it is clear that the arbitration agreement is functioning just like a release or


43

class opt-out distributed by defendants in order to limit their liability in a pending

class action, and it should be treated accordingly. See infra, Part III. C.

Here, Uber’s agreement was an attempt to effectively convert the pending

Rule 23 class actions already pending (such as Yucesoy) into opt-in actions.

Further, it was disseminated in a clear attempt to nullify the District Court’s

December 9, 2015, Order, which would have cleared the way for these drivers to

participate as potential class members in the Yucesoy case (as well as other class

cases already pending). As such, these agreements undermine the integrity of the

class action process, and the District Court erred in allowing Uber to reissue them

with the addition of a minor corrective cover letter.28

28 The minor changes of the corrective cover letter that the District Corder

would, as a practical matter, make no difference to whether drivers would

understand what rights were at stake and what they would need to do to protect

their rights. Even the corrective notice ordered by the court would have been

presented to drivers as a tiny-print 17-page legally dense agreement shrunk to the

size of an iPhone screen. OCONNOR-SER-151-67.

Uber has pointed to the fact that so many drivers did opt out of the

December 2015 agreement as evidence that the agreement did provide them

adequate notice of their rights. Br. at 18-19. However, as a practical matter, it

appears evident that the vast majority (if not all) of the drivers who opted out of

this agreement were those who were in contact with Plaintiffs’ counsel, or viewed

counsel’s website, www.uberlawsuit.com, which explained to drivers what was at

stake with respect to the arbitration clause, or learned about it from other drivers,

or from the media (who have been closely following this case and this issue in

particular). See Yucesoy, Civ. A. No. 3:15-cv-00262 (N.D. Cal.), Dkt. 103. It

does not appear likely that any significant number of drivers actually opted out of

the December 2015 arbitration clause because they had actually seen it, read it, and

understood it. Plaintiffs’ counsel submitted evidence regarding the large number

of drivers who contacted her firm in the wake of receiving the December 2015


http://www.uberlawsuit.com/

44

With or without a corrective notice (which as a practical matter would at

most only marginally increase the understanding of putative class members

regarding what rights they have at staike), the result is the same: if a company such

as Uber is permitted to distribute new aribitration agreements while a class case is

pending, so as to dramatically decrease the number of potential class members who

might be able to participate in the case, it is thus able to undermine the protections

provided by Rule 23 to ensure that a court will oversee and supervise the fair

administration and prosecution of a class action. Rule 23 provides courts with the

power – and responsibility – to ensure the integrity of the class process. Allowing

a defendant to undermine that integrity by unilaterally limiting the scope of the

potential class and dictating the terms under which someone can participate as a

class member (including effectively turning an “opt-out” process to an “opt-in”

process) undermines that integrity.

Thus, the District Court’s Order should be reversed insofar as it failed to

grant Plaintiffs’ Emergency Motion for Protective Order in its entirety, and

allowed Uber permission to continue issuing arbitration agreements to putative

class members in these cases and thereby limit its potential liability and the ability

of those potential class members to participate in pending litigation.

agreement and who expressed confusion regarding whether they needed to opt out

or not opt out in order to participate in the class action, as well as how to opt out.

ER-285-89, OCONNOR-SER-51-52.


45

A. By Allowing Uber to Distribute New Arbitration Agreements to

Putative Class Members in Cases Already Filed, the Court

Essentially Converted These Class Action Cases From Opt-Out To

Opt-In Proceedings, Thus Undermining the Dictates of Rule 23.

Uber’s distribution of its December 2015 arbitration agreement has required

drivers to take an affirmative step to remain potentially a part of these proceedings;

drivers must opt out of arbitration in order to, in effect, opt in to these cases.

Uber’s de facto imposition of an opt-in regime, which requires an affirmative

response from would-be class action members, runs counter to the nature and

purpose of Rule 23. Courts have consistently rejected attempts to convert a Rule

23 class action into a de facto opt-in proceeding, such as, for example, by requiring

“mandatory class-member questionnaires” on pain of dismissal. Kern v. Siemens

Corp., 393 F.3d 120, 125 (2d Cir. 2004); see also Enter. Wall Paper Mfg. Co. v.

Bodman, 85 F.R.D. 325, 327 (S.D.N.Y. 1980) (rejecting the notion that “each

person receiving notice be required to file a statement of claim in order to qualify

as a class member”); Cox v. Am. Cast Iron Pipe Co., 784 F.2d 1546, 1557 (11th

Cir.1986) (“Used in a Rule 23(b)(2) setting, a discovery order threatening

dismissal for non-compliance amounts to no more than an affirmative ‘opt-in’

device—that is, it requires passive class members to take positive action to stay in

the suit.”); McCarthy v. Paine Webber Group, Inc., 164 F.R.D. 309, 313

(D.Conn.1995) (“Dismissal of an absent class member's claims as sanctions for


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46

failure to answer a questionnaire is contrary to the opt-out policy of Rule 23”).

Specifically, courts have recognized that:

requiring the individuals affirmatively to request inclusion in the lawsuit

would result in freezing out the claims of people—especially small claims

held by small people—who for one reason or another, ignorance, timidity,

unfamiliarity with business or legal matters, will simply not take the

affirmative step.

Kern, 393 F.3d at 124. Thus, by requiring would-be class members to take an

extra step to participate in the litigation, Uber has subverted the opt-out mechanism

that is fundamental to the Rule 23 class action.29

Rule 23’s opt-out mechanism serves a critically important purpose by

assuring effective enforcement of wage laws, and mitigating against a number of

factors that would otherwise discourage workers from vindicating their rights

under those laws. It is widely recognized that opt-out class actions will result in

greater participation, and thus, better enforcement of the wage laws, than an opt-in

process. Commentators have generally recognized that, where cases are governed

by an “opt-in” mechanism (such as under the FLSA), opt-in rates are typically in

the range of 15 to 30 percent of a potential class. In contrast, where cases are

29 Uber’s actions are particularly egregious with respect to the certified class in

O’Connor where an opt-out class under Rule 23 has already been certified.

Plaintiffs have already satisfied the stringent requirements of class certification,

only to have the entire process of court-supervised notice undermined unilaterally

by the defendant, who did not even consult or inform class counsel of its

intentions.


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governed by the “opt-out” mechanism of Rule 23, typically very few class

members opt out (less than 3% in employment law class actions on average). See

infra, n. 36. Thus, “there is widespread agreement that an opt-in regime results in

fewer workers advancing wage claims than under an opt-out regime.” Brunsden,

29 Berkeley J. Emp. & Lab. L. at 297. Moreover, Rule 23’s opt-out regime

mitigates against a number of factors that discourage participation in an opt-in

process, including lack of knowledge or understanding regarding the laws,30 small

claim amounts,31 perceived and actual risks of taking affirmative action against

30 Phillips Petroleum Co. v. Shutts, 472 U.S. 797, 813 (1985) (a potential class

may be “so unfamiliar with the law” that he will not sue individually or

affirmatively request to be included in a legal action); Moscarelli v. Stamm, 288

F.Supp. 453, 461 (E.D.N.Y. 1968) (“One of the purposes of a class action is to

provide a remedy for those who have been injured by a fraudulent course of

conduct but who, because of their economic situation or ignorance, are unable to

protect themselves by separate lawsuits.”).

31 See, e.g., McLaughlin v. Liberty Mut. Ins. Co., 224 F.R.D. 304, 312 (D.

Mass. 2004) (lack of incentive to bring individual claims); Phillips Petroleum Co.,

472 U.S. at 812-13 (one of the advantages of opt-out class actions is that each

individual’s “plaintiff’s claim may be so small[] . . that he would not file suit

individually, nor would he affirmatively request inclusion in the class if such a

request were required”); Mace v. Van Ru Credit Corp., 109 F.3d 338, 345 (7th Cir.

1997) (“The policy at the very core of the class action mechanism is to overcome

the problem that small recoveries do not provide the incentive for any individual to

bring a solo action prosecuting his or her rights.”); Chase v. AIMCO Properties,

L.P., 374 F. Supp. 2d 196, 198 (D.D.C. 2005) (“individual wage-and-hour claims

might be too small in dollar terms to support a litigation effort”).


48

one’s employer,32 educational and language barriers and transitory worker

populations,33 and general inaction, non-receipt or non-opening of legal notices,

and reluctance to sign unrequested legal papers. All of these advantages of the

Rule 23 class action mechanism are lost when a defendant is permitted to

unilaterally limit participation in the class by distributing an arbitration agreement

to potential class members after a case is filed but prior to class certification.

Indeed, it has been widely recognized that Rule 23’s opt-out regime is

fundamentally different from the opt-in method utilized in FLSA collective

actions. The two methods have been described as “polar opposites.” See John C.

Coffee, Jr., Litigation Governance: Taking Accountability Seriously, 110 Colum.

32 See, e.g., Guzman v. VLM, Inc., 2008 WL 597186, *8 (E.D.N.Y. Mar. 2,

2008) (citing workers’ “fears of retaliation”); Ramirez v. RDO-BOS Farms, LLC,

2007 WL 273604, *2 & n.1 (D. Or. Jan. 23, 2007) (noting evidence that workers

may not have opted in to FLSA collective action because they were “fearful to

join”); Jankowski v. Castaldi, 2006 WL 118973, *2 (E.D.N.Y. Jan. 13, 2006)

(reasoning that potential class members might not have opted in to the FLSA

action due to fear of reprisal, particularly given their citizenship status); Ingram v.

Coca-Cola Co., 200 F.R.D. 685, 701 (N.D. Ga. 2001) (“[a]bsent class treatment,

each employee . . . would have to undertake the personal risk of litigating directly

against his or her current or former employer).

33 Leyva v. Buley, 125 F.R.D. 512, 518 (E.D. Wash. 1989) (“Given the

circumstances of the potential class members, a class action appears superior to

joining each migrant worker individually, or requiring them to bring independent

actions. With their lack of English, their presumably limited understanding of the

legal system, the fact that few live permanently within the Eastern District of

Washington, and their generally indigent status, it is highly unlikely that the

individual plaintiffs would pursue this litigation if class certification were not

allowed”).


49

L. Rev. 288, 301 (2010); see also Haro v. City of Rosemead, 94 Cal. Rptr. 3d 874,

877-78 (Cal. App. 2d Dist. 2009) (“The procedural dynamics of a collective action

when plaintiffs opt in are different from the class action when parties may opt out

of the class”). In fact, “substantial legal authority supports the view that by adding

the ‘opt out’ requirement to Rule 23 in the 1966 amendments, Congress prohibited

‘opt in’ provisions by implication.” Kern v. Siemens Corp., 393 F.3d 120, 124 (2d

Cir. 2004). “In sum, [opt-in] actions are not class actions.” Haro, 94 Cal. Rptr.3d

at 877-78; see also Clark v. Universal Builders, Inc., 501 F.2d 324, 340 (7th

Cir.1974) (“[T]he requirement of an affirmative request for inclusion in the class is

contrary to the express language of Rule 23(c)(2)(B)”); Enter. Wall Paper Mfg. Co.

v. Bodman, 85 F.R.D. 325, 327 (S.D.N.Y. 1980) (“Rule 23(c)(2)(B) calls for a

notice that enables prospective members to opt-out, in language strongly

suggesting the impropriety of opt-in requirements”).

Here, by requiring drivers to “opt-out” of Uber’s revised arbitration

agreement in order to remain part of pending class action cases, Uber effectively

turned Rule 23 on its head and converted these cases into opt-in proceedings rather

than the opt-out class action proceedings envisioned by Rule 23.34 In other words,

34 As Plaintiffs vigorously argued in their Emergency Motion for Protective

Order, Uber’s actions have caused confusion (and will continue to do so if Uber is

permitted to continue sending revised agreements to putative class members

unchecked). See ER-275 to ER-286; Makaeff v. Trump U., LLC, 2015 WL

5638192, at *5 (S.D. Cal. Sept. 21, 2015) (“[A]n opt-out card included with the


50

Uber’s actions have required drivers to take an affirmative step to remain

potentially a part of these proceedings; drivers must opt out of arbitration in order

to, in effect, opt in to these cases – a step that discourages many (and would

effectively eliminate) would-be class members.35 See, e.g., Samuel Issacharoff &

Geoffrey P. Miller, Will Aggregate Litigation Come to Europe?, 62 Vand. L. Rev.

179, 203-04 (2009) (“American experience suggests that the opt-in procedure will

face difficulty in attracting widespread participation.”); Judith Resnik, Fairness in

Numbers: A Comment on at&t v. Concepcion, Wal-Mart v. Dukes, and Turner v.

Rogers, 125 Harv. L. Rev. 78, 140, n. 367 (2011) (“The FLSA's collective action

mechanism has been criticized as less effective than Rule 23.”); De Asencio v.

Tyson Foods, Inc., 342 F.3d 301, 310 (3d Cir. 2003) (“Under most circumstances,

the opt-out class will be greater in number, perhaps even exponentially greater”

notice could very well be construed by many class members as an opt-in card,

resulting in class members unwittingly excluding themselves from the litigation.”);

Leuthold v. Destination Am., Inc., 224 F.R.D. 462, 470 (N.D. Cal. 2004)

(“Confusion would likely result in asking potential plaintiffs both to opt in and to

opt out of the claims in this suit.”).

35 Uber’s motives are clear: “[i]t is no secret that banks, insurance companies,

and other potential corporate defendants do not like class actions. Today, such

potential defendants, in a broad array of industries, hope that they have found a

surreptitious way to defeat the feared class action: mandatory binding arbitration.”

Jean R. Sternlight, As Mandatory Binding Arbitration Meets the Class Action, Will

the Class Action Survive?, 42 Wm. & Mary L. Rev. 1, 5 (2000).


51

than an opt-in class).36 Uber should not be permitted to limit the size of the class

and to do away with the advantages of the Rule 23 class action mechanism by

unilaterally limiting participation in the class through promulgation of an

arbitration agreement during the pre-certification stage.

B. The FAA Does Not Preempt Fed. R. Civ. P. 23 And Does Not Grant

Uber An Unfettered Right to Distribute Arbitration Agreements To

Putative Class Members So as to Unilaterally Undermine Rule 23

And Engage in Gamesmanship With Respect to Pending Class

Litigation.

Uber decries the District Court’s interference with its contracts and suggests

that it has an absolute and inviolable right to promulgate arbitration agreements

whenever and however it pleases, relying on the Supreme Court’s decisions in

AT&T Mobility LLC v. Concepcion, 563 U.S. 333 (2011), and American Exp. Co.

36 “Historically, the FLSA's opt-in mechanism has limited the size of the FLSA

action, with estimates indicating that typically only between fifteen and thirty

percent of potential plaintiff-employees opt-in.” See Rachel K. Alexander, Federal

Tails and State Puppy Dogs: Preempting Parallel State Wage Claims to Preserve

the Integrity of Federal Group Wage Actions, 58 Am. U.L. Rev. 515, 518 (2009);

see also Andrew C. Brunsden, Hybrid Class Actions, Dual Certification, and Wage

Law Enforcement in the Federal Courts, 29 Berkeley J. Empl. & Lab. L. 269, 291-

94 & n.125 (2008) (average opt-in rate of 15.7% from 21 cases reviewed); Gary L.

Sasso, et al., Defense Against Class Certification, 744 P.L.I./Litig. 389, 511

(2006); Matthew W. Lampe & E. Michael Rossman, Procedural Approaches for

Countering the Dual-Filed FLSA Collective Action and State-Law Wage Class

Action, 20 The Lab. Law. 311, 313 (2005). By contrast, opt-out rates average less

than 3% in employment law class actions under Rule 23. See Theodore Eisenberg

& Geoffrey Miller, The Role of Opt-Outs and Objectors in Class Action Litigation:

Theoretical and Empirical Issues, 57 Vand. L. Rev. 1529, 1532, 1549 (2004).


52

v. Italian Colors Rest., 133 S. Ct. 2304 (2013).37 However, although these rulings

have been recognized generally as the Supreme Court’s condonation of companies

employing class action waivers generally, in the context of implementing

arbitration as an alternative to court litigation, in the ordinary course of business,

nothing in these rulings need be ready to suggest that courts must turn a blind eye

to employers’ gamesmanship implementation of arbitration agreements to thwart

class litigation so as to reduce their potential liability in already-pending cases.

While these cases may suggest that courts be respectful of companies’ use of

arbitraton agreements for legitimate business purposes, those rights are not

inviolable and subject to such abuse as Uber has attempted to utilize them here.

Courts still clearly have the right to control class communications under the

powers vested in them by Rule 23(d). And, once a class case is filed, a court has

the power under Rule 23(d) to control communications with the class or putative

class, and that power extends to ensuring defendants cannot unilaterally limit the

scope of the class by distributing revised arbitration agreements to putative class

members after a case has been filed.

37 Notably, in Concepcion and American Express, the Supreme Court held that

the FAA preempts state law principles that the Court found failed to place

arbitration agreements on an equal footing with other contracts. However, Rule 23

is the result of a federal enactment. See Shady Grove Orthopedic Associates, P.A.

v. Allstate Ins. Co., 559 U.S. 393, 400 (2010). Thus, there is no reason to think

that these cases require that the FAA allows Uber to trample on the federal Rule

23’s established procedures governing class actions.


53

The power to oversee the class dynamics rests with the court. Thus, while

companies may well be permitted to distribute arbitration agreements containing

class waivers in certain instances, this recently proclaimed legal right should not

give them free license to engage in such gamesmanshiplike behavior that Uber has

once a class case has been filed. There is simply no reason why the FAA should

give a company such as Uber license to deploy arbitration in the midst of an

ongoing class action in such a way as to subvert Rule 23’s court-approved notice

and opt-out process. The FAA “requires courts to enforce agreements to arbitrate

according to their terms . . . unless the FAA's mandate has been ‘overridden by a

contrary congressional command.’” CompuCredit Corp. v. Greenwood, 132 S. Ct.

665, 669 (2012) (quoting Shearson/American Express Inc. v. McMahon, 482 U.S.

220, 226 (1987)). Rule 23 was enacted pursuant to federal Congressional action

under the Rules Enabling Act. See Shady Grove, 559 U.S. at 400 (“Congress . . .

has ultimate authority over the Federal Rules of Civil Procedure; it can create

exceptions to an individual rule as it sees fit—either by directly amending the rule

or by enacting a separate statute overriding it in certain instances.”); Charles A.

Wright, Class Actions, 47 F.R.D. 169, 170 (1970) (noting that in 1966 Congress

enacted a revised Rule 23: “a bold and well-intentioned attempt to encourage more

frequent use of class actions”). Throughout its briefing, Uber urges and suggests

that it has an absolute and sacrosanct right to distribute new arbitration agreements


https://a.next.westlaw.com/Link/Document/FullText?findType=Y&serNum=0292102943&pubNum=0000344&originatingDoc=Icf707c851b6111e38578f7ccc38dcbee&refType=LR&fi=co_pp_sp_344_170&originationContext=document&transitionType=DocumentItem&contextData=(sc.Search)#co_pp_sp_344_170

54

to its drivers no matter the implication for the Rule 23 process. However, there is

no reason not to see Rule 23 as at least on an equal footing with the FAA, as it is

likewise a “congressional mandate.” See Balasanyan v. Nordstrom, Inc., 2012 WL

1944609, *3 (S.D. Cal. May 30, 2012) (citing In re Currency Conversion Fee

Antitrust Litigation, 361 F.Supp.2d 237 (S.D.N.Y.2005); Williams v. Securitas

Security Services USA, Inc., 2011 U.S. Dist. LEXIS 75502 (E.D. Pa. 2011)

(“various courts have relied on Rule 23 to invalidate arbitration provisions since

Moses H. Cone was decided.”). There is simply no reason to think that the FAA

should be deemed to preempt or overrule Rule 23’s notice and opt-out process, and

that Uber should be permitted to distribute new arbitration agreements to on

putative class members that would likely affect ther rights in already-filed class

cases without court supervision.

Although the Supreme Court has signaled a general endorsement of

arbitration placing limits on the ability to participate in class actions, through its

decision in Concepcion, 563 U.S. 333 (2011), it has not ruled that arbitration

agreements are permissible in all circumstances – a fact that courts have

acknowledged when they have prohibited the type of gamesmanship Uber is

engaging in here. See Balasanyan, 2012 WL 1944609, *2, n. 4 (“Even assuming

Nordstrom could prove its argument that arbitration agreements have a preferred

status, it has not attempted any discussion of its implicit contention that the Rules


55

Enabling Act and Fed. R. Civ. P. 23 do not qualify as a type of the ‘congressional

mandate’ supposedly required by CompuCredit” as a “contrary congressional

command”).38 “[W]hen two statutes are capable of co-existence, it is the duty of

the courts, absent a clearly expressed congressional intention to the contrary, to

regard each as effective.” Morton v. Mancari, 417 U.S. 535, 551 (1974); California

ex rel. Sacramento Metro. Air Quality Mgmt. Dist. v. United States, 215 F.3d

1005, 1012 (9th Cir. 2000) (“[I]t is a well established axiom of statutory

construction that, whenever possible, a court should interpret two seemingly

inconsistent statutes to avoid a potential conflict.”). Because Uber’s urged reading

of the FAA would conflict with Rule 23, the FAA need not be read to allow the

conduct at issue here, and the District Court had grounds under federal law – Rule

38 Indeed, “Congress acknowledged the impropriety of consumer and

employee arbitration prior to the passage of the Act of 1925 and assured concerned

members of Congress that the Act merely guaranteed enforcement of freely entered

arbitration agreements between parties of equal bargaining power.” Marc J.

Mandich, AT&T v. Concepcion: The End of the Modern Consumer Class Action,

14 Loy. J. Pub. Int. L 205, 212-13 (2012); see Arbitration Fairness Act of 2011, S.

987, 112th Cong. (2011). “Thus, the proposed ‘Arbitration Fairness Act of 2011’

… represents the widely felt sentiment that the totality of Supreme Court case law

regarding consumer and employee arbitration runs contrary to the FAA's language

and purpose.” Id.


56

23 – to prohibit Uber’s conduct as interfering with the rights of putative class

members in a pending class case.39

C. Uber’s December 2015 Arbitration Agreement, Distributed

Nationwide Two Days After the District Court Held Its Previous

Agreement Unenforceable, Was Not An “Ordinary Business

Communication”, But Was Instead a Clear Attempt To Escape The

District Court’s Recent Ruling And Limit Its Liability in Cases

Already Filed for Which Classes Had Not Yet Been Certified.

Uber’s distribution of a revised arbitration agreement to putative class

members during the pendency of the litigation and in admitted response to a court

ruling issued two days earlier is improper and should not have been permitted as it

39 The District Court’s solution that Uber should simply provide putative class

members with marginally better notice is simply not sufficient to protect their

rights. Indeed, when faced with situations in which defendants have attempted to

distribute documents to putative class members that would affect their rights in a

pending class case (including releases, class opt outs, and arbitration clauses),

courts have frequently simply stricken them outright – not, as the District Court

ordered here, given the defendant another chance to distribute the documents,

albeit with marginally enhanced notice. See, e.g., Guifu Li, 270 F.R.D. 509; Wang,

236 F.R.D. at 489; County of Santa Clara, 2010 WL 2724512 at *4; Slavkov, 2015

WL 6674575 at *2, *7; Freidman, 730 F. Supp. 2d at 764; Billingsley, 560 F.

App'x at 919. Here, in a case where Uber has repeatedly used arbitration

agreement to try to limit its potential classwide liability, it should not be permitted

to continue being given more chances to do so. Given Uber’s repeated distribution

of revised arbitration agreements in order to protect itself from ongoing class

litigation, it is unrealistic to expect drivers to understand that they must opt out in

order to protect their rights to participate in ongoing class litigation brought to

advance their interests. It is especially unrealistic to expect drivers to realize they

must continue opting out, over and over again, to protect their rights in already-

filed, ongoing cases. The clear intent of Uber’s actions has been to reduce as much

as possible the number of drivers who might ever be permitted to participate in a

class action.


57

was blatant gamesmanship and an attempt to “unfairly thwart potential [] plaintiffs’

ability to [participate]” in pending litigation. Espinoza, 2015 WL 9592535, *3

(S.D. Fla. Dec. 31, 2015). Indeed, a number of courts have recognized that where

a defendant distributes an arbitration agreement in the midst of ongoing litigation,

which is clearly intended to reduce participation in a class case (as opposed to, for

example, merely distributing an arbitration agreement in the ordinary course of

business), the defendant’s improper motive provides additional grounds for a court

to invalidate the agreement. See id. (noting that “presentation of agreements to

arbitrate disputes …was motivated, at least in part, by the filing of this civil action”

and “was intended, at least in part, to dissuade entertainers from participating in

this civil action” and invalidating the agreements on these grounds); Williams,

2011 WL 2713741, *3 (“Whatever right Securitas may have to ask its employees

to agree to arbitrate, its current effort … is confusing and misleading and clearly

designed to thwart unfairly the right of its employees to make an informed choice

as to whether to participate”); Billingsley, 560 F. App'x at 922 (“Whatever right

Citi Trends may have had to ask its employees to agree to arbitrate, the district

court found that its effort in the summer of 2012 was confusing, misleading,

coercive, and clearly designed to thwart unfairly the right of its store managers to

make an informed choice”); O'Connor, 2013 WL 6407583, *4 (N.D. Cal. Dec. 6,

2013) (“[T]here is a distinct possibility that the arbitration provision and class


58

waiver imposed by Uber was motivated at least in part by the pendency of class

action lawsuits” and noting that this weighed in favor of regulating Uber’s

communication with class members).

For example, in an earlier Order in O’Connor, the District Court

distinguished between a defendant sending out an arbitration agreement “for

normal business purposes, and not [as] an attempt to thwart the pending class

action lawsuit,” as opposed to sending out an agreement in direct response to

developments in the litigation as an attempt to limit its liability. Id. at *6. The

District Court reiterated that distinction in its Order below, noting that “[t]here can

be little doubt that the purpose of the new Agreement is not purely an isolated

business decision but one which is informed by Uber’s litigation strategy” and that

it was sent as “a direct response to the Court’s ruling in the ongoing class action

litigation” – a fact which “Uber does not dispute.” ER- 4. This is in stark contrast

to cases where the Court found that the arbitration agreements had been in place

long before the litigation and were disseminated in the ordinary course of

business.40 This distinction makes sense, as arbitration was never intended to be

40 See, e.g., Pablo v. ServiceMaster Glob. Holdings Inc., 2011 WL 3476473,

*2 (N.D. Cal. Aug. 9, 2011) (“[T]he Court is faced with evidence that numerous

arbitration agreements were signed by defendants and their employees, as well as

affidavits stating that defendants have utilized these agreements for at least the past

eight years”); Balasanyan v. Nordstrom, Inc., 294 F.R.D. 550, 573-74 (S.D. Cal.

2013) (“[T]the court concedes that Nordstrom was engaging in a standard practice


59

misused as a device to subvert the court-supervised Rule 23 process of class action

litigation. Moreover, as discussed supra, pp. 39-42, arbitration agreements are not

specially exempt and there is no reason they should be treated any differently from

other forms of improper releases and class opt-outs that a defendant employer may

distribute in the course of a class action case, which simply seek to pick off

putative class members and diminish a defendant’s potential liability.

When arbitration is used admittedly and in such a gamesmanlike manner in

the midst of litigation as a strategic attempt to thwart a class action and eliminate

the practical ability of most class members to obtain relief sought on their behalf,

the defendant’s actions should be policed by the District Court under Gulf Oil. As

such, the District Court here should have exercised its powers under Rule 23 and

granted Plaintiffs’ Motion for Protective Order in its entirety. The District Court

should not have allowed Uber to continue disseminating agreements to putative

class members in the pending cases (including Yucesoy, O’Connor, and other

cases) so as to thwart the potential for those cases to obtain relief for most of the

class. As noted above, courts have stricken such attempts by defendants to obtain

ex parte opt-outs, releases, as well as arbitration agreements, after class cases have

that many companies engage in when hiring new employees” and holding that

where new employees signed the arbitration agreement in the ordinary course of

the established hiring process, the agreements were enforceable).


60

been filed and without giving defendants another chance to do it “better” – and

thus thwart the court’s power to control such class dynamics. There was no reason

for the District Court here to give Uber another chance – and thereby drastically

limit its potential liability by turning the Rule 23 mechanism on its head to

unilaterally make these effectively “opt-in” rather than “opt-out” proceedings.

CONCLUSION

For all the reasons set forth herein, this Court should:

Uphold those aspects of the District Court’s Order that invalidate Uber’s

December 11, 2015, arbitration agreement as to members of the certified class

in O’Connor and which enjoin Uber from engaging in any further

communications that are “reasonably likely to affect the prosecution and

adjudication of the O’Connor class action or engender confusion in respect

thereto, except with approval of class counsel or the Court,” including the

“promulgation of any future arbitration agreements to certified class members

purporting to affect claims asserted in O’Connor.” ER-5.

Reject Uber’s request for an order that the District Court exceeded its powers

by ordering corrective notice in connection with Uber’s issuance of new

arbitration clauses to putative class members in pending cases.

Reverse those aspects of the District Court’s Order that allow Uber to continue

promulgating new arbitration agreements to the putative class members in


61

already-pending class cases, including Yucesoy, O’Connor (with respect to

putative class members who have, at least to date, been excluded from the class,

but whose exclusion is still subject to appeal), and other pending class cases.

Dated: March 3, 2016

Respectfully submitted,

/s/ Shannon Liss-Riordan______


Attorney for Plaintiff-

Appellees/Cross-Appellants Douglas

O’Connor, et al. and Hakan Yucesoy,

et al.


62

STATEMENT OF RELATED CASES

Plaintiff-Appellees/Cross-Appellants Douglas O’Connor, et al. and Hakan

Yucesoy, et al., are aware of the following related cases: (1) O’Connor v. Uber

Techs., Inc., No. 14-16078, District Court No. 3:13-cv-03826-EMC; (2) Mohamed

v. Uber Techs., Inc., No. 15-16178, District Court No. 3:14-cv-05200-EMC; (3)

Gillette v. Uber Techs., Inc., No. 15-16181, District Court No. 3:14-cv-05241-

EMC; (4) Yucesoy v. Uber Techs., Inc., No. 15-17422, District Court No. 3:15-cv-

00262- EMC; (5) Del Rio v. Uber Techs., Inc., No. 15-17475, District Court No.

3:15-cv- 03667-EMC; (6) O’Connor v. Uber Techs., Inc., No. 15-80220, District

Court No. 3:13-cv-03826-EMC.

Dated: March 3, 2016 /s/ Shannon Liss-Riordan_____


63

CERTIFICATE OF COMPLIANCE

I hereby certify that this Principal and Response Brief on Cross-Appeal

complies with the limitations of Fed. R. App. P. 32(a), Fed. R. App. P. 28.1, and

Ninth Circuit Rule 32 because:

(1) Pursuant to Fed. R. App. P. 28.1(e)(2)(B), this Principal and Response

Brief on Cross-Appeal contains 16,491 excluding the parts of the brief exempted

by the Federal Rule of Appellate Procedure 32(a)(7)(B)(iii).

(2) This brief complies with the typeface requirements of Fed. R. App. P. 32

because the motion has been prepared in 14-point Times New Roman, which is a

proportionally spaced font that includes serifs.

Dated: March 3, 2016 /s/ Shannon Liss-Riordan_______

Shannon Liss-Riordan, Esq.



Boston, MA 02116

617-994-5800

[email protected]

Attorney for Plaintiff-Appellees/Cross-

Appellants Douglas O’Connor, et al. and

Hakan Yucesoy, et al.


64

CERTIFICATE OF SERVICE

I hereby certify that on March 3, 2016, I caused the foregoing document to

be filed with the Clerk of the United States Court of Appeals for the Ninth Circuit

using the CM/ECF system, which will provide notification of this filing to all

counsel of record.

Dated: March 3, 2016 /s/ Shannon Liss-Riordan

Shannon Liss-Riordan, Esq.



Boston, MA 02116

617-994-5800

[email protected]

Attorney for Plaintiff-Appellees/Cross-

Appellants Douglas O’Connor, et al. and

Hakan Yucesoy, et al.


mailto:[email protected]

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